While Macy’s may be planning to shutter 125 stores, it is not giving up on brick-and-mortar retail. It is just moving away from shopping malls
The department store is closing a fifth of its locations at struggling malls, but will be testing.
“Mall-based stores were once the primary channel for where our consumers purchased their apparel and home goods,” said Macy CEO Jeff Gennette at the company’s investor day on Wednesday. “The reality is we have a large number of customers no longer shopping regularly at malls.” The idea is that by positioning stores closer to where people live and work, it will become more convenient for them to drop by. There are 115,000 strip centers in the United States, compared to 1,200 shopping malls, according to a Morgan Stanley report published in December, which cited data from the International Council of Shopping Centers.
While retailers like Macy’s and Sephora are not fleeing from malls altogether, it is clear they see value in a store base that has a mix of sizes and locations. For instance, Macy’s will close three locations at underperforming malls in Dallas but will also open three of its off-price Backstage locations and two Market stores in the city. “Our footprint in the Dallas-Forth Worth area will have more units, but less square footage and a mix of formats,” said Gennette.
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