Last fall, Macy’s laid off 2,000 corporate workers and launched a three-year strategy to shutter 125 stores. Prior to that were hundreds of thousands of furloughs — jobs that have not all come back.
The company also announced it would abandon its core position as an anchor tenant at some “lower tier malls” and move into smaller, standalone stores in an effort to regain its economic footing. At the time, the company’s CEO Jeff Gennette asserted his belief that the best malls around the country would continue to thrive.
Still another 80 Macy’s stores are slated to close through 2023, CBS reported.
Macy’s closed 29 stores in 2020, putting the company at roughly 540 locations by the end of the year. It had 771 total stores, including Bloomingdale’s and Bluemercury, during the second quarter of 2020, which ended in June.
The pullback reportedly saved the company $600 million in 2020 and will net another $1.5 billion in savings during the next two years.
Big department stores such as Macy’s have always been a mainstay at malls as they lure retail traffic to smaller shops, kiosks and food courts, providing much-needed financial stability.
But the pandemic crippled what had been a surefire business model as many shoppers bypassed malls in favor of buying online. High-end department stores in particular have struggled more than other retailers including Walmart and Target.
Macy’s managed to find a silver lining during the pandemic as sales boomed on its online store and mobile app to the tune of more than $6 billion per year in sales.
Last September, the retailer reported online sales grew 53% from where they were in 2019, leading to a boost in overall revenue that surprised Wall Street and caused the company’s shares to jump.
The recovery at storefronts, however, remained weak throughout most of 2020, according to CNBC.
Macy’s continues to monitor competitors to inform its own economic strategy and has adjusted its outlook several times throughout the pandemic.
Last May, three months after announcing a deal to bring a $14 million technology hub to Midtown Atlanta, Macy’s reversed course and backed out, citing the pandemic. The facility would have created 630 new jobs.
Macy’s most recent earnings report showed it had $91 million in losses compared with the same period in 2019. Revenue for the third quarter of 2020 fell to $4 billion compared with $5.1 billion during the same quarter in 2019, CBS reported.