Macy’s Is Closing Underperforming Stores as Its Turnaround Attempt Continues

Macy’s (M) released a list of dozens of “underperforming stores” it plans to close as part of a multi-year turnaround campaign, including its Philadelphia City Center and Downtown Brooklyn locations.

The retailer’s first batch of 66 planned closures will reduce its footprint in 22 states, with downsizing most significant in California, New York, Florida, and Texas, according to a list released Thursday. These shops will run clearance sales for up to 12 weeks before shuttering, according to Macy’s website.

In all, the retailer plans to close 150 stores over three years as part of a comeback strategy it unveiled last February called “A Bold New Chapter.” The plan also involves investing in small-format stores and adding more Bloomingdale’s and Bluemercury locations.

Macy’s unveiled the strategy amid plummeting sales and a proxy fight from a group of activist investors. (The retailer encountered a second activist campaign last month after the first was unsuccessful.)

Macy’s Says Plan Starting to Pay Off

According to Macy’s, the “Bold” plan is starting to pay off, with sales having improved for three consecutive quarters at stores that received fresh investment.

“We are closing underproductive Macy’s stores to allow us to focus our resources and prioritize investments in our go-forward stores, where customers are already responding positively to better product offerings and elevated service,” CEO Tony Spring said.

Macy’s reported a nearly 7% year-over-year decline in comparable sales on an owned basis in the fiscal year ended February 2024. The company is expected to report its latest full-year results next month; Analysts polled by Visible Alpha are looking for comparable sales to fall 1.6% for the most-recent year, and 0.2% in the year ahead.