Business News | THE ANGELUCCI BUSINESS TIMES
Suffering US Retailer Macy’s Will Close 150 Stores
Macy’s claims that this move is necessary to improve its shopping experiences and provide compelling value on its products.
Macy’s wants to close 150 of its least productive stores soon, or 30% of its locations. After announcing its decision on Tuesday, February 27th, Macy’s Inc. shares dropped 14.5% from $20.39 per share to $17.44 today.
In case you haven’t heard of Macy’s before, it’s an American department store that mainly sells clothing for men, women, and children, as well as cosmetics, shoes, fragrances, and other products.
Recently, Macy’s has been having some trouble with its stores not providing the experiences they want their customers to have, and the lack of profit from 150 stores is causing the American department store many issues. Three hundred and fifty of Macy’s productive locations will continue operating.
New plans for Macy’s Future
Macy’s now plans to move its focus to its luxury stores like Bloomingdale’s and Bluemercury to reach a more profitable audience of shoppers. Inflation has likely been affecting the prices of more affordable clothing to reach levels that are too much for the average customer to accept.
However, with luxury brands, the target audience typically doesn’t mind paying extra money due to inflation when they’re already planning on spending several hundred to thousands of dollars on their apparel.
Reasons for closure of 150 Macy’s stores
Macy’s new Chief Executive Officer, Tony Spring, gave the following reasons for closing 150 of Macy’s retail stores:
”We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value.”
Macy’s wants to improve the stores that are doing well and focus on providing the best experiences at those stores, while closing stores that have been going through difficulties and aren’t staying up to Macy’s standard.
According to some Macy’s employees from a San Francisco store, they believe that the store they work at will be closed in three years due to daily rampant shoplifting, causing the store’s unproductiveness and lack of profit. They reported that shoplifters took at least 4 blazers, 10 wallets, and 20 packs of underwear every day.
Macy’s recently rejected a takeover offer, claiming that it undervalued Macy’s business. Despite this decision to not sell the company, Macy’s has been underperforming for a decade.
Summary
Macy’s will be closing 150 of their unproductive stores — 30% of all their stores — due to a lack of productivity, a lack of profit, and theft. Macy’s new CEO, Tony Spring, is hopeful for their future and wants Macy’s stores to provide a better experience to their customers.
Despite Macy’s company underperforming for a decade, it made the decision to not sell the company in a takeover offer. Macy’s now plans to move its focus to its luxury stores like Bloomingdale’s and Bluemercury.
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