Macy’s to open smaller stores, bigger fulfillment centers

Department store chain sees net loss of $431M

National /
Sep.September 02, 2020 10:14 AM
Macy's CEO Jeff Gennette (Getty Images)

Macy’s CEO Jeff Gennette (Getty Images)

Who ever said bigger is better?

Macy’s has unveiled a plan to open smaller, off-mall stores and fulfillment centers, while consolidating its current locations.

“Everything on the digital agenda has been accelerated,” CEO Jeff Gennette said on the retailer’s second quarter earnings call Wednesday.

The department store’s flagships have been hit hard by the pandemic as tourism diminished and employees in downtown areas shifted to working from home. However neighborhood locations saw some action from digital sales being fulfilled in stores.

Macy’s did not reveal how many off-mall stores or fulfillment centers it will be opening. But in all, the company has 771 locations between Macy’s, Bloomingdale’s and Bluemercury. The number of Macy’s stores have decreased to 546 from 551 in the first quarter of 2019, while Bloomingdale added one location during the quarter.

But the retailer’s plans to shutter locations predates the pandemic. In February, Macy’s announced it planned to shut 125 stores over the next three years. The company said that those plans have not changed

In all, Macy’s had a rough quarter as it suffered a net loss of $431 million. Net income was $86 million during the same time last year.

To capitalize on digital sales — which grew 53 percent from a year ago — the department store plans to redesign its supply chain, with centralized fulfillment centers.

“The store remains a very, very important component of our brands,” Gennette reassured. “We want to have all the right access points for our customers however they want to shop, whenever they want to shop.”

Still, moving forward, Gennette said that the company expects digital to make up 40 percent of business. That’s supported by the 4 million new digital customers that Macy’s recruited in the second quarter, 3.8 million of whom are new to the brand.

Macy’s did receive some rent relief from its landlords in recent months, but it did not indicate from whom nor for how much.

“We’ve had some really amazing conversations with our retail partners, with our landlords” CFO Felicia Williams said. “We’ve been really respectful of each other’s positions”

That has not been the case across the board, however. Bloomingdale’s was recently sued by the Stahl Organization for $2.5 million of missed rent at its 2085 Broadway location in New York.

Contact Sasha Jones at [email protected]


Related Articles

arrow_forward_ios
Fritz Kaegi

Higher tax bills cometh for commercial landlords in south, west suburbs

Higher tax bills cometh for commercial landlords in south, west suburbs
66 Orland Square with GW Properties CEO Mitch Goltz and BlitzLake Partners CEO David Blitz (Google Maps)

Facing foreclosure, GW Properties hands over Orland Park shopping center

Facing foreclosure, GW Properties hands over Orland Park shopping center
Mayor Lori Lightfoot and a restaurant in downtown Chicago (Getty)

Chicago to ease capacity limits, open bars

Chicago to ease capacity limits, open bars
The former Target in Calumet City will be converted into a working farm (Google Maps)

For latest retail redevelopment, old Target will become new farm

For latest retail redevelopment, old Target will become new farm
The Chicago Loop’s retail vacancy rate could eclipse 20% this year, by some estimates (Photo by Interim Archives/Getty Images)

“There’s going to be pain, and people are going to get hurt”: Chicago retail’s ugly future

“There’s going to be pain, and people are going to get hurt”: Chicago retail’s ugly future
Governor of Illinois J. B. Pritzker (Credit: Joshua Lott/Getty Images)

State offers lifeline to devastated hospitality industry

State offers lifeline to devastated hospitality industry
Illinois Gov. J.B. Pritzker with Jimmy Choo and Disney in Magnificent Mile (Credit: Lt. Col. Bradford Leighton via Wikipedia Commons, Google Maps)

Protected with plywood: Retailers board up shops along Mag Mile

Protected with plywood: Retailers board up shops along Mag Mile
Governor J.B. Pritzker (Credit: Joshua Lott/Getty Images)

Chicago’s gyms, movie theaters, bowling alleys prepare for severe restrictions

Chicago’s gyms, movie theaters, bowling alleys prepare for severe restrictions
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...