Top retailing chain Macy’s said it has plans to close the curtain on 35 to 40 underperforming stores — yet to be selected in 2016.
The Denver Post reported the closure of the number of outlets will result in a combined revenue of about $300 million. Macy’s also stated that employees who will be affected with the impending closure may be offered available positions at newer locations, whereas laid off workers will be given severance.
Macy’s has around 770 stores and over the last five years it has shut down 52 underperforming stores while opening 12 more locations.
CEO Terry Lundgren stated Macy’s will remain a dominant store operator and will even add six new locations for offprice Macy’s Backstage due to open this fall.
According to USA Today, Lundgren remarked, "As new shopping centers are opened, however,many customers change their shopping habits and often the sales volume of a store gets divided among the new and nearby, existing centers.” He continued pruning stores which performed poorly essentially creates focus all its resources to the best store locations thereby maintaining a stable physical presence.
A spokesman for the company also said that stores perform key roles in aiding Macy’s comply with online orders and also enabling shoppers who made their orders online to pick up their orders in physical outlets. “While making the decision to close stores is hard, we know it is necessary for us to remain competitive as customer shopping patterns continue to change,” added the spokesman, as per Forex Report Daily.
Macy’s stock has been greatly affected after a month of market volatility, shares plunged down to 20 percent from the success it achieved in mid-July. The company’s plan of closing 35 to 40 underperforming stores cut short nearly a seven-year winning hit as the retailer carefully navigated the Great Recession and its persisting aftermath that pulled down a number of competitors.