Macy’s, Inc. has unveiled its Bold New Chapter strategy, signaling a major shift for the iconic department store retailer. Macy’s plans to close 150 underproductive nameplate stores — approximately 50 this year alone — and continue its expansion of smaller-format stores as it prioritizes investment in about 350 go-forward locations.
Additionally, noting that its luxury banners have been outperforming other divisions, Macy’s will open about 15 Bloomingdale’s stores and at least 30 new Bluemercury locations over the next three years, along with remodeling approximately 30 existing Bluemercury stores.
“A Bold New Chapter serves as a strong call to action,” said Tony Spring, who took the helm as Macy’s CEO earlier this month, in a statement. “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.”
The third pillar of the new strategy will be simplifying and modernizing end-to-end operations. The retailer plans to rationalize and monetize its supply chain asset portfolio, streamline fulfillment, improve inventory planning and allocation and deliver a scalable technology platform.
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The Bold New Chapter is in part a counterargument to activist investors who have been demanding changes in Macy’s strategies. Earlier this month Arkhouse Management put forward a slate of nine nominees to the Macy’s Board of Directors that includes former executives from retail heavyweights Hudson’s Bay Co., Target, The Vitamin Shoppe and Victoria’s Secret. It’s also a chance for newly minted CEO Spring to put his mark on the struggling retailer.
Macy’s executives unveiled the new strategy along with disappointing Q4 and full-year 2023 financial results. Q4 net sales of $8.1 billion were 1.7% lower than the same period in 2022, with comp sales down 5.4% on an owned basis and 4.2% on an owned-plus-licensed basis. For the full year, net sales of $23.1 billion represented a 5.5% drop from 2022. Both digital (down 7%) and brick-and-mortar sales (down 5%) contributed to the poor results. Comp sales fell 6.9% on an owned basis and 6% on an owned-plus-licensed basis in 2023 compared to 2022.
