73.2 F
Fort Worth
Friday, October 23, 2020
Business Macy's plans to close 100 stores, boost online investment

Macy’s plans to close 100 stores, boost online investment

Other News

JC Penney sees bankruptcy protection exit by Christmas

NEW YORK (AP) — J.C. Penney believes it will emerge from bankruptcy protection before Christmas under a new ownership agreement that would...

Petalo, not Charmin: Virus brings Mexican toilet paper to US

By JOSEPH PISANI AP Retail Writer NEW YORK (AP) — Toilet...

Mall owners close to buying JC Penney out of bankruptcy

By ANNE D'INNOCENZIO AP Retail WriterNEW YORK (AP) — Mall owners Simon Property Group and Brookfield Property Partners are close to a...

At Home launches collection with Fort Worth connection

At Home Group Inc. (NYSE: HOME), The Home Décor Superstore, has debuted an exclusive collection with interior...

NEW YORK (AP) — Macy’s said Thursday it plans to close about 100 stores next year and boost its online investments as the nation’s largest department store chain tries to become more nimble in an increasingly fierce market. The closures represent close to 14 percent of its stores under the Macy’s brand.

The company, which operates the upscale Bloomingdale’s stores as well, said it would increase its exclusive products and would prioritize its investments in the stores that offer the highest growth potential.

Macy’s also reported Thursday that second-quarter profits and sales fell. The results, however, beat Wall Street estimates, and its shares rose more than 14 percent, or $4.95 to $38.95 in early trading.

“The announcements we are making today represent an advancement in our thinking on the role of the stores, the quality of the shopping experience we will deliver, and how and where we reinvest in our business for growth,” said Macy’s President Jeff Gennette, who will succeed Terry J. Lundgren as CEO in the first quarter of 2017.

Macy’s had been a stellar performer since the Great Recession, but in the past year and a half, the company has seen slowing sales as it battles competition on all fronts and changing shopping patterns. People are spending more of their money on home improvement as well as experiences like travel or spas. And when they do buy clothing, they’re going to T.J. Maxx or fast-fashion chains like H&M. They’re also increasingly researching and buying online, and gravitating toward Amazon.com, which is bolstering its store private label fashion brands. Amazon.com is by some forecasts expected to surpass Macy’s as the largest online seller of clothing next year.

Under Lundgren, Macy’s hasn’t been sitting still and has been looking for opportunities to boost sales, from buying upscale beauty brand Bluemercury to launching its own off-price stores called Macy’s Backstage. But since this past May, it announced it has to accelerate its efforts to get shoppers excited. It planned to look for new ways to cut expenses and use that money for more sales help at the stores and online. And it’s expanding its offerings on exclusive launches including one backed by Sir Elton John and Lady Gaga.

With the store closures, Macy’s will have 666 stores including 38 Bloomingdale’s locations. That’s down about 23 percent from a peak in January 2007 of 868 stores including Bloomingdale’s. Annual net sales at the storesMacy’s plans to shutter were estimated at about $1 billion. Many of the stores will close in early 2017, with the balance closing as leases or other agreements expire or are amended.

Macy’s said it earned $11 million, or 3 cents per share, in the quarter ended July 30. That compares with $217 million, or 64 cents per share, in the year-ago period. Excluding charges that are related to store closings, the company earned 51 cents, which is above the 48 cent estimate from FactSet.

While Macy’s earnings beat Wall Street expectations, it still has a long way to go to see business perk up. Revenue fell 3.9 percent to $5.87 billion. That topped the $5.77 billion estimate from FactSet. Revenue at stores open at least a year, including licensed businesses like beauty, were down 2 percent in the second quarter. Excluding licensed departments, sales were down 2.6 percent. That’s the sixth straight decline for that measure.

The company said it was sticking to its outlook. Macy’s had said in May that it expects revenue at stores, including business from licensed departments, open at least a year to be down 3 percent to 4 percent. Macy’s also said it still expects earnings to be in the range of $3.15 to $3.40 for the year.

Latest News

US airlines still piling up losses but say demand is rising

By DAVID KOENIG AP Airlines WriterDALLAS (AP) — Airlines are piling up billions of dollars in additional losses as the pandemic chokes...

Pandemic hurts AT&T in 3rd quarter; wireless unit stable

By TALI ARBEL AP Technology WriterNEW YORK (AP) — The pandemic continued to hit AT&T through the third quarter as closed theaters,...

American, Southwest, Alaska add to airline loss parade in 3Q

By DAVID KOENIG AP Airlines Writer DALLAS (AP) — Airlines are piling up billions of dollars in additional losses...

US jobless claims drop to 787,000, but layoffs remain high

By CHRISTOPHER RUGABER AP Economics Writer WASHINGTON (AP) — The number of Americans seeking unemployment benefits fell last week...

Tesla posts net profit for fifth straight quarter

By TOM KRISHER AP Auto WriterDETROIT (AP) — Tesla charged through a summertime auto industry sales slump in the U.S. to post...