Old-fashioned department stores take the defeat: Macy’s closes stores

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Mike Mozart | Flickr

Angelica Tejada

The largest department store chain in the United States said it now has “an updated strategy and three-year plan designed to stabilize profitability and position the company for growth,” in a press release statement on  Feb. 4.

This decision was made by the department store chain in response to the struggle it has faced alongside other department stores across the United States, following the rise of online shopping leading to fewer shoppers heading to the stores to purchase items in person. 

“The company is also cutting roughly 2,000 corporate jobs, or 10% of the corporate and support staff and closing several offices,” according to The Wall Street Journal. 

“Cobbled together from various regional chains, the company has struggled even as it left the weakest malls and boosted spending on e-commerce,” the article said. 

New York City is set to hold Macy’s sole corporate headquarters, including operations for the department store’s online website, Macys.com, that were placed in San Francisco, California.  

Around 400 Macy’s stores will remain open after the closing of 125 stores and “about 100…will get what Macy’s calls ‘growth treatment’ in 2020, which includes improvements to the physical store and investments in merchandising strategies, technology, talent and local marketing,” which the company has already applied to 150 stores so far, according to Business Insider. 

Macy’s CEO Jeff Gennette is still determined, even as Macy’s is planning on closing stores, to make the large department store chain last in today’s consumer lifestyle. 

Gennette plans on expanding Macy’s Backstage, which is an outlet store that can be found within the department store that sells products at a cheaper price, by placing locations outside of shopping malls.

Additionally, Gennette is set to “test Market by Macy’s, a new format that will be smaller than a typical Macy’s store and carry the chain’s merchandise, as well as local goods and food,” according to The New York Times. 

“The new chain will open outside malls in so-called lifestyle centers.”

T.J. Maxx, a large department store company, has become one of Macy’s leading competitors as it sells similar clothing and products at cheaper prices, which attracts more customers. 

The changes to the remaining Macy’s stores and its online website presence have been made in mind to over compete the other department stores. 

Macy’s “begins a reset to fixed cost base to stabilize and then grow profitability and cash flows; expects annual gross cost savings of $1.5 billion to be fully realized by year-end 2022, with $600 million gross cost savings achieved in 2020,” added the company in a press release statement. 

Within the three-year plan made by Macy’s, the department store chain plans to not only reach consumers in today’s popular online shopping climate but also save its company from losing more profits. 

“Our goal is to reclaim and revitalize what a department store should be,” said Bennett in an interview, according to The Wall Street Journal. 

“Department stores are still vital if they are done right. There is viability to having many categories and brands under one roof.” 

Macy’s department stores and offices will close all around the United States, but the company has planned efforts to prevent further closings.