The retail giant has shuttered dozens of underperforming stores, many of them in declining shopping malls, since 2016 as it invests more in its most lucrative properties. Even so, it has struggled to win over customers who are increasingly buying online. On Wednesday, Macy’s said same-store sales — a key measure at stores open at least one year — fell 0.6 percent in November and December. That compares with the 1.1 percent growth recorded during the same period last year. Analysts said the performance was disappointing given the relative strength of the holiday season, in which overall retail sales grew 3.7 percent.
“Macy’s performance … shows the group is still losing customers and market share at a rapid clip,” Neil Saunders, managing director of research firm GlobalData Retail, wrote in a note to clients.
Macy’s, founded 162 years ago in New York, was for decades one of the nation’s preeminent retailers. It had anchor stores at hundreds of shopping malls and was one of the largest sellers of apparel in the United States. But changing consumer habits and mounting competition from Walmart, Amazon and Target have reversed its fortunes in recent years. Same-store sales fell 3.5 percent in the third quarter of 2019, while profits were down 97 percent from the same period a year earlier. (Jeff Bezos, founder and chief executive of Amazon, owns The Washington Post.)
Macy’s has been investing heavily in its website and 150 top-performing stores, which Saunders said helped shore up overall holiday performance. The company, which had $25 billion in sales in 2018, is one of the nation’s largest retailers.
“The stores where it has been focusing investment looked very festive,” he wrote. “Online performed well, too, thanks to a reasonable assortment and convenient delivery and pickup options. Together, these two parts of the business saved Christmas for Macy’s.”
In addition to 608 Macy’s and Bloomingdale’s stores, the company operates 171 Bluemercury beauty shops and has been building up its fleet of Macy’s Backstage outlets. Its “Story” concept stores, meanwhile, offer a range of experiences, including yoga classes and cooking workshops aimed at attracting younger shoppers who do most of their buying online.
Shares of the retailer’s stock rose about 3 percent Wednesday and are up about 10 percent so far this year.
In 2016, Macy’s announced plans to shutter 100 of its stores, although the company declined to say whether the latest closures were included in that count.
This week’s announcement comes as widespread store closures, bankruptcy filings and layoffs continue to rattle brick-and-mortar retailers. U.S. companies announced a record 9,300 store closures last year, according to Coresight Research, and analysts said they expect that trend to continue into the new year.
On Monday, Pier 1 Imports, the furniture and home goods chain, said it would close up to 450 of its 936 stores, as well as some of its distribution centers, after a 13 percent drop in quarterly sales. The company also plans to lay off corporate employees at its Fort Worth headquarters.