Macy’s experiments with “dark stores”

Retailer saw net loss of $91M in third quarter

National /
Nov.November 19, 2020 12:15 PM
Macy’s CEO Jeff Gennette (Getty; iStock)

Macy’s CEO Jeff Gennette (Getty; iStock)

As Macy’s grapples with a net loss of $91 million in the third quarter, the brand is reimagining what the future of its business may look like.

One possible answer: fulfillment centers.

As two of its stores went “dark,” or closed to in-person shopping, they were converted into processing centers for online orders. The stores, in Colorado and Delaware, will be used to fulfill online and curbside orders.

“We’re experimenting with that,” Macy’s CEO Jeff Gennette said on an earnings call Thursday.

Other brands, including Whole Foods, are testing out dark stores as shoppers have avoided in-person retail due to the pandemic.

Overall, Macy’s recorded $3.9 billion in net sales, below the $5 billion it racked up during the same time last year. Still, its earnings were above what it recorded in the second quarter, when the retailer suffered a net loss of $431 million.

The company’s sales were largely driven by an increase in e-commerce, which grew by 27 percent over the same time last year. Online sales made up 38 percent of the company’s total sales in the third quarter.

The retailer operates 764 stores across its Macy’s, Bloomingdale’s and Bluemercury brands, but seven locations have closed between the second quarter and now.

Gennette also noted that while Macy’s neighborhood locations are seeing customers return, their flagships are struggling, largely due to the lack of tourism and office workers.

“When you look at Herald Square, you look at 59th Street at Bloomingdale’s, State Street, Union Square — they are our most challenged,” Gennette said.

Other stores are similarly reckoning with the prominence of e-commerce and how to fulfill online orders. On Wednesday, Target announced that it would take a different approach: opening more stores to fulfill digital sales.






    Related Articles

    arrow_forward_ios
    President Joe Biden’s American Rescue Plan was passed over the weekend. (Getty / Photo Illustration by Kevin Rebong for The Real Deal)
    What real estate gets in Biden’s $1.9 trillion package
    What real estate gets in Biden’s $1.9 trillion package
    (Getty, iStock)
    Movie theaters’ future uncertain as studios focus on streaming
    Movie theaters’ future uncertain as studios focus on streaming
    Theaters in some cities are opening with restrictions. (Getty, Photo Illustration by Alison Bushor for The Real Deal)
    Coming attraction: Movie theaters reopen in New York, San Fran
    Coming attraction: Movie theaters reopen in New York, San Fran
    Restaurants and bars accounted for a majority of the gains in February (iStock)
    Leisure, hospitality big winners in February job gains
    Leisure, hospitality big winners in February job gains
    The company currently operates 761 stores, and intends to open 100 new stores this fiscal year. (iStock)
    Retailer Burlington plans to double store count
    Retailer Burlington plans to double store count
    Ascena owns Ann Taylor, Lane Bryant, Lou & Grey and Cacique. (Getty)
    Ascena restructuring approved post-bankruptcy
    Ascena restructuring approved post-bankruptcy
    (Getty)
    Disney will shutter dozens of brick-and-mortar stores
    Disney will shutter dozens of brick-and-mortar stores
    Apollo Global Management will take over craft retailer Michaels in a deal that values the company at $3.3 billion. (Wikipedia Commons, iStock)
    Craft retailer Michaels to go private in $5B deal
    Craft retailer Michaels to go private in $5B deal
    arrow_forward_ios

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

    Loading...