Macy’s Inc.’s, amid declining sales and profitability, is springing into action to deliver what investors and customers have been waiting for – change.
On Tuesday, the company’s new chief executive officer Tony Spring said Macy’s will close approximately 150 underproductive locations through 2026, including about 50 by the end of the fiscal year, prioritize investment in approximately 350 “go-forward” locations, and further expand its small-format store chains. The corporation’s small retail formats are Bloomies, specialized and downsized Macy’s, Bloomingdale’s outlets, and Backstage off-price units.
In addition, Spring said the plan, dubbed “A Bold New Chapter,” calls for:
- Approximately 15 Bloomingdale’s nameplate stores and at least 30 new Bluemercury stores to open in new and existing markets over the next three years, along with roughly 30 Bluemercury remodels.
- Monetizing $600 million to $750 million of assets through 2026.
- Rationalizing and monetizing the supply chain, streamlining fulfillment, improving inventory planning and allocation, and delivering a scalable technology platform.
- Beginning in 2025, a low-single-digit annual comparable owned and licensed marketplace sales growth, annual SG&A dollar growth below the historic rate of inflation of 2 to 3 percent, and annual adjusted EBITDA dollar growth in the mid-single-digit range.
“A Bold New Chapter serves as a strong call to action. It challenges the status quo to create a more modern Macy’s, Inc. We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value,” Spring, said in a statement. “Our teams are energized by the work ahead as we accelerate our path to market share gains, sustainable, profitable growth and value creation for our shareholders.
For the fourth quarter, Macy’s posted a net loss of $71 million compared to a profit of $508 million in the year ago quarter.
Earnings before interest, depreciation and amortization fell to $156 million, from $887 million in the year-ago period. Macy’s Inc. generated net sales of $8.1 billion, down 1.7 percent from $8.3 billion in the year-ago quarter.
For the fourth quarter of 2023, digital sales decreased 4 percent versus the fourth quarter of 2022. Brick-and-mortar sales were roughly flat versus the fourth quarter of 2022. Comparable sales, owned and licensed, were down 4.2 percent.
For the year, Macy’s Inc. generated $105 million in net income and sales of just over $23 billion. That compares to a net of $1.18 billion and sales of just over $24.4 billion in 2022.
Though the fourth quarter results were weak, they beat Wall Street expectations. Macy’s is under pressure by Arkhouse and Brigade Capital Management, which recently bid $5.8 billion to buy Macy’s Inc. Macy’s rejected the offer.
