Macy’s workers brace for retailer’s next wave of closures. Which stores will be next?
It’s not yet clear what the sweep of store closures announced by retail giant Macy’s means for the Tacoma-Seattle area or Washington state.
On Tuesday, the retailer said it was entering a “bold new chapter” and was preparing to close around 150 stores nationwide through 2026, with about 50 of those closures occurring by the end of its fiscal year. It plans to focus on expanding its Bloomingdale’s and Bluemercury luxury brands.
After the restructuring is completed, Macy’s will be left with 350 stores.
Announcements of where those closures would happen is still to come. Macy’s corporate office did not immediately respond to a request for comment from The News Tribune on Tuesday.
In its full-year 2023 financial report released Tuesday, it listed net sales of $23.1 billion, down 5.5 percent compared with 2022. Digital sales were down 7 percent versus 2022, and brick-and-mortar sales were down 5 percent from the previous year.
“A Bold New Chapter serves as a strong call to action,” CEO Tony Spring said in a statement Tuesday. “It challenges the status quo to create a more modern Macy’s, Inc. We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value.”
Nick Egelanian is founder and president of Siteworks Retail, a retail real estate consulting firm. In a phone interview Tuesday, he told The News Tribune that Macy’s problems go back decades when its current mall stores were first built as department “everything” stores.
“They were built to be the Walmarts of their day,” he said. “So they’ve been been shedding departments ... and they’ve been outmaneuvered by all the discounters that have surrounded them.”
“It dies as its customers die in a sense,” he said. “If you’re a young customer, you don’t shop at Macy’s — you shop at TJ Maxx; you shop at Marshalls; you shop at HomeGoods.”
Competitors such as Nordstrom also are not exempt from retail headwinds in a changing marketplace, he noted.
“It’s a problem of relevancy. It’s not a problem of price. It’s not a problem of real estate. It’s a problem of making those stores meaningful to people who are spending discretionary income,” he said.
As for Macy’s, he added, “What they shouldn’t be doing is spending any more time on these new small concepts and all that. Their future is not doing Macy’s Jr.’s or Macy’s marketplaces or whatever. Every minute they spend on that is a wasted minute.”
He sees a path for higher end development of its stores, particularly on both U.S. coasts, that could help sustain the rest of its business.
“If they can’t get the core of that chain to be relevant in high-end malls, they have no future,” he said.
Macy’s announcements this week follow a recent $5.8 billion takeover offer from two investment firms that the company rejected in January. Also in January, Macy’s announced layoffs of more than 2,000 workers and five store closings.
That same month in Washington state, UFCW 3000 ratified a new contract with Macy’s covering workers in Bellingham, Tukwila and Lynnwood stores after more than 400 unionized workers launched an unfair labor practices strike.
On Tuesday, Joe Mizrahi, UFCW 3000 Secretary Treasurer, said in a statement: “The news that Macy’s corporation is planning to close hundreds of stores, without regard for the impact on thousands of employees who provide essential customer service the business depends on, is disappointing, but sadly not surprising.
“This is more of the same from a company that is more interested in monetizing real estate than running retail stores,” he added.
The union, in its release, stated that “UFCW 3000 is prepared to support and protect the rights of our members in the event Macy’s corporation intends to close stores in Washington.”
Macy’s for now retains a store presence in most of the region’s malls, including Tacoma, Puyallup and Olympia.
This story was originally published February 28, 2024 at 5:00 AM.
