Macy’s Inc., one of the most iconic names in American retail, has confirmed plans to close 66 underperforming stores across 22 states in 2025. This move is part of the company’s “Bold New Chapter” strategy, announced in February 2024, which aims to return the company to sustainable, profitable sales growth by focusing on its most successful locations and expanding its luxury brands.
Store Closures Across the U.S.
The closures, which are slated for 2025, have already begun to take effect, with many of the locations already shuttered by mid-May. These closures are concentrated in areas where stores have struggled to meet sales targets due to declining foot traffic and changing consumer habits. In total, Macy’s plans to shut down a mix of traditional department stores, with some being standalone locations while others are situated in regional malls.
“While this was a difficult decision, it is part of our larger goal to refocus our business on the stores and services that matter most to our customers,” said Jeff Gennette, CEO of Macy’s, in a recent statement. “By closing these underperforming stores, we are making investments in areas that will drive growth and enhance our customer experience.”
The “Bold New Chapter” Strategy
Macy’s restructuring effort is part of its broader “Bold New Chapter” initiative, a multi-year plan that seeks to revitalize the brand. According to the company, the focus will now be on 350 of its most successful stores, which will receive further investments to remain at the forefront of the retail landscape. These stores, which are largely located in major metropolitan areas, will see enhanced technology upgrades, improved customer service, and a greater emphasis on exclusive product lines.
In addition to its commitment to these key locations, Macy’s is expanding its portfolio of luxury and specialty brands. As part of this strategy, the company will open 15 new Bloomingdale’s stores and 30 new Bluemercury stores across the U.S. by 2025. These premium brands are expected to drive growth in an increasingly competitive retail environment, where shoppers are gravitating toward high-end and curated offerings.
“While our department store business continues to be a significant part of our brand, we recognize the opportunity in expanding the Bloomingdale’s and Bluemercury concepts,” Gennette continued. “These brands offer a differentiated experience that aligns with evolving consumer preferences, and we believe they will complement our long-term vision.”
The Rise of E-Commerce and Changing Consumer Preferences
Macy’s is not the only retailer facing challenges as it navigates the complex landscape of changing shopping habits. The continued rise of e-commerce, accelerated by the COVID-19 pandemic, has led to a fundamental shift in how consumers make purchasing decisions. Online shopping has grown exponentially, with companies like Amazon, Walmart, and Target dominating the e-commerce space.
As of 2024, U.S. retail e-commerce sales are expected to total $1.37 trillion, up 10.6% from 2023. This growth is particularly evident in categories like fashion, electronics, and home goods, which have seen the biggest surge in online transactions. Meanwhile, traditional department stores like Macy’s, which built their empires on a physical retail model, have struggled to transition fully to digital platforms.
In response to these challenges, Macy’s has made significant investments in its online presence. The company revamped its website and mobile app, and it has embraced new technologies like augmented reality and virtual shopping tools to enhance the online shopping experience. Macy’s has also expanded its fulfillment capabilities, ensuring that customers can receive their orders quickly and reliably, even if they shop primarily online.
However, despite these efforts, experts agree that the physical retail space is facing a challenging future, particularly for traditional department stores. The U.S. retail industry is expected to see a massive wave of closures in the coming years. Retail experts estimate that around 15,000 stores will close in 2025 alone, double the number of closures from the previous year. Over the next five years, projections suggest that up to 45,000 retail locations could shut their doors permanently as part of this ongoing trend.
Macy’s closures are part of this broader retail contraction, but the company is not alone. Other major retailers, such as JCPenney and Kohl’s, are also downsizing their physical footprints in favor of digital investments and niche product offerings. JCPenney, for example, has closed a number of its stores in the past two years as part of a restructuring plan, and it has shifted more resources toward its online and direct-to-consumer operations.
The Impact on Employees and Communities
While the company has emphasized that the closures are part of its efforts to refocus and strengthen its position in the market, the move has raised concerns for the employees and communities affected by the store closures. According to Macy’s, the impacted workers will be offered severance packages and assistance with finding new roles within the company, where possible. However, with the retail industry facing widespread downsizing, the transition for many employees may be difficult.
Community leaders in regions with significant closures have expressed concern over the economic impact of losing a major retail anchor. In smaller towns, Macy’s often plays a key role in the local economy, providing jobs and attracting shoppers to nearby businesses. The closure of a Macy’s store can have ripple effects, particularly in communities that rely heavily on retail commerce for employment and economic activity.
The decision to close these stores was not made lightly. Macy’s has assured both its employees and customers that it is committed to maintaining a strong presence in local markets and continuing to serve them through its remaining stores and digital channels.
A Long-Term Vision
Looking ahead, Macy’s remains committed to reinventing itself as a leader in the retail space. While the store closures mark a significant shift in its approach, the company believes that by narrowing its focus to high-performing locations and expanding its portfolio of luxury and specialty brands, it can position itself for long-term growth.
For now, the company’s primary focus will be on increasing the profitability of its remaining locations, continuing to grow its e-commerce business, and expanding its premium retail offerings. The next few years will be critical in determining how successful Macy’s can be in transitioning into the new era of retail. As the company continues to adapt to changing consumer preferences, it is clear that Macy’s is determined to remain a major player in the evolving retail landscape.
By: Monica Patel
