After announcing it would close around 125 stores in February, Macy’s Inc. is going to test their luck with smaller stores that are away from underperforming malls.
Continue Reading Below
This business switch up includes the company’s two department store chains, Macy’s and Bloomingdales, according to Chairman and CEO Jeff Gennette, who spoke with investors during Wednesday’s second-quarter earnings call.
“Over the next two years, we will open several smaller format off-mall Macy's and we will test a smaller format off-mall Bloomingdale's,” Gennette explained. “As we shared in February, every off-mall store will have full service for pickup and returns. We continue to believe that the best malls in the country will thrive. However, we also know that Macy's and Bloomingdale's have high potential off-mall and in smaller formats.”
The test stores will reportedly be opened in Dallas, Atlanta and Washington.
Macy’s Inc.’s upcoming small-scale stores are only one part of a business strategy it has named “Polaris.” Other plans include strengthening customer relationships and loyalty programs, curating quality fashion and accelerating digital growth.
The company also plans on optimizing its store portfolio and resetting its cost base as ways to conserve cash.
In June, Macy’s Inc. dodged bankruptcy after it secured around $4.5 billion in financing. Competing department store chains such as JCPenney and Neiman Marcus did not fare as well in light of coronavirus-related store closures and filed for Chapter 11 bankruptcy in May.
For the second quarter of 2020, Macy’s Inc. made nearly $3.56 billion in net sales, according to the company’s reported earnings results. During the same period last year, the company made nearly $5.55 billion in net sales, though this was long before the coronavirus pandemic.
When factoring in the first quarter of 2020 as well, Macy’s made closer to $6.58 billion.