Macy’s will close nearly a fifth of its locations as business in malls dwindle.
The department store chain plans to shut down 125 stores within the next three years, including 30 stores that are currently in the process of now, the company announced Tuesday.
Macy’s also plans to curtail 2,000 corporate jobs, amounting to 10 percent of corporate and support staff, The Wall Street Journal reported. Overall, the company said it expects to save $1.5 billion by the end of 2022 and $600 million gross savings by the end of 2020.
“The changes we are making are deep and impact every area of the business, but they are necessary,” Macy’s CEO Jeff Gennette said in a release. “I know we will come out of this transition stronger, more agile and better fit to compete in today’s retail environment.”
Macy’s, which will continue to operate 400 namesake stores, has experienced a loss in customers after the emergence of services like Amazon. The 161-year-old chain is experimenting by inserting its stores in strip centers where most people shop, as opposed to malls, the Journal reported.
Gennette said the company attempted to breathe life back into the department stores in malls by decreasing their size and reorganizing what they sold, but “didn’t find a solution,” according to the newspaper.
In 2016, Macy’s said it would close 100 of its lower-performing stores. Two years later, the company refurbished 150 of its best stores, and Gennette said another 100 will be updated this year, the Journal reported. Four or five new stores are also expected to open by the end of 2020, including in Dallas and Washington, along with another seven free-standing Macy’s Backstage discount stores.
In addition to the 400 Macy’s stores, 40 Bloomingdale’s stores, 170 Bluemercury beauty chain locations and 216 Macy’s Backstage stores will continue to operate. Most Backstage stores are located within Macy’s locations.