A Macy’s store in west suburban Bloomingdale is one of 68 the retailer will close by this spring.
In August, Macy’s announced plans to close about 100 stores, a cost-cutting move made as customers’ shopping habits change and sales shift online, but the retailer didn’t specify which stores would shut down.
“We are closing locations that are unproductive or are no longer robust shopping destinations due to changes in the local retail shopping landscape, as well as monetizing locations with highly valued real estate,” Macy’s Chairman and CEO Terry Lundgren said in a news release Wednesday.
The Bloomingdale store originally operated as Marshall Field’s and opened in Stratford Square in 1981. Two additional Illinois stores, in Alton and Bloomington, are also among the 68 slated to close. Macy’s said it expects to close about 30 more over the next few years.
The retailing giant has been examining its portfolio of city flagship stores, including Chicago’s State Street store. No plans for that location were announced, but Macy’s said it signed an agreement to sell a downtown Minneapolis store open since 1902 to 601W Cos., which will redevelop the building with a mix of office and retail space.
About 3,900 store employees, including 87 at the 149,000-square-foot Bloomingdale store, will be affected by the closings. Some may be offered spots at nearby stores where possible, and eligible employees will be offered severance benefits, Macy’s said.
Although Macy’s has been working on growing online sales and trimming expenses, traffic is still falling in stores, where Macy’s does most of its business, Lundgren said in the news release.
Sales at stores open for at least a year during November and December were down 2.1 percent compared with the same months the previous year, Macy’s said in a separate news release Wednesday.
“While our sales trend is consistent with the lower end of our guidance, we had anticipated sales would be stronger,” Lundgren said in the release.
Macy’s is also working on cost-cutting measures that include restructuring its central organization and eliminating layers of management and making changes to store operations “given the reduced store sales and evolving customer behavior.” Those changes will lead to another roughly 6,200 job cuts, Macy’s said.
Macy’s estimates the changes announced Wednesday would save about $550 million annually, starting in 2017, according to the news release.
The retailer said it would invest $250 million in improving Macy’s online business and initiatives it thinks can improve in-store growth, including expanding the off-price Macy’s Backstage stores and Macy’s-owned cosmetics chain Bluemercury. Macy’s plans to open about 50 of each within the next two years, though all of the Backstage stores and some Bluemercury stores will be inside existing Macy’s stores.
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