American retail giant, Macy’s, announced at the end of last week that it intends to close 100 stores within a period of 12 months (representing 15% of its capacity). It follows on from the closure of 90 stores (and the opening of 13) over the past 6 years and the January 2016 announcement that it was laying off thousands of workers to reduce costs by some US$400 million.
The intended closure of 100 stores will represent around US$1 billion but although Jeff Gennette, Macy’s Inc President, commented that they are all “currently cash-positive today, but their volume and profitability in most cases have been declining steadily in recent year”.
The stated intention going forward is to introduce a series of initiatives going forward that will strengthen Macys as the USA’s “premier omnichannel shopping destination”. The company has in fact reported an improvement in second quarter sales for 2016 but a drop in net profit.