Macy's has extended its schedule for closing roughly 65 more stores, saying it's now in a strong financial position and can bide its time to strike the best deals to sell its properties.
New York-based Macy's — parent of its namesake chain, Bloomingdale's and Bluemercury — offered the update on its footprint-optimization plan when it reported its fiscal fourth-quarter earnings on Wednesday. Macy's has just finished up the second year of its "Bold New Chapter" turnaround strategy, a plan unveiled in 2024 to downsize and monetize parts of its store fleet and to focus on its more profitable locations.
Now Macy's said it plans to push back the deadline for closing a total of 150 stores from 2026 to 2028, and that it expects to generate more proceeds than expected from its property sales.
The department store retailer isn't the only one shaking up its real estate portfolio, with Saks Global, the parent of Saks Fifth Avenue and Neiman Marcus, announcing plans to close more than 80 stores as part of its bankruptcy proceedings. Nordstrom, set to close one of its Dallas locations next month, has shuttered two other U.S. stores in the past year, including one in St. Louis and in Santa Monica, California.
Tony Spring, who took the helm of Macy's as CEO and chairman two years ago, is executing the plan to rid the chain of ailing namesake stores and to boost its flagging sales. It closed 64 of them last year and will shut another 14 this year, planning to end up with 350 stores when the downsizing is completed. The retailer is seeing results, a boost in revenue, from the reimagined "going-forward" stores it is updating compared with the rest of its portfolio. It has added another 75 stores to the 125 it's already making improvements to.
"At Macy's, we're confident in the reimagined location's ability to deliver profitable growth," Spring said.
More time for store closings
The original plan called for closing 150 underperforming Macy's stores by the end of 2026, but the retailer is extending the timeline for the shutdown. At this point, Macy's has about 65 locations left to shut, but it can be patient about doing transactions, according to Chief Financial Officer Tom Edwards.
"With our strong balance sheet and cash flow generation, we can be flexible on timing of transactions," he said on the earnings call. "In order to maximize value of remaining assets, we now expect closures through 2028."
The goal "is to have an optimized fleet on a market-by-market basis that supports our broader Macy's omnichannel business," Edwards told Wall Street analysts.
"We've rigorously evaluated the future and current performance of our stores and the real estate value," he said. "While we don't provide an advance closure guidance, I would look to that three-year timeframe for the remaining approximate store closures. That'll allow us to wait for the most favorable real estate market in order to get the most value for our shareholders and for our business."
Macy's previously predicted it would generate $500 million to $650 million from property sales and now expects that to rise to as much as $700 million, according to Edwards. It also previously said it could monetize the assets — a move that may or may not including selling — at a value up to $750 million.
"And that leaves us, after we've monetized approximately $400 million, $250 million to $300 million to go," he said.
There were only asset-sale gains of $3 million last year compared with 2024's $41 million, reflecting fewer transactions year over year, according to Macy's.
Fiscal 2025 was perhaps a turning point, with both Macy's and its Macy's nameplate returning to comparable sales growth. In the fourth quarter alone, Macy's overall had a 1.8% increase in comparable sales, with the numbers buoyed by luxury retailer Bloomingdale's performance.
Improvements noted
Neil Saunders, a retail analyst and managing director at analytics firm GlobalData, on Wednesday issued a note on Macy's results.
"Here the whole group achieved a 1.8% uplift for the quarter and, for the first time in a long time, has pushed into positive comparable territory for the full fiscal year," Saunders wrote. "In our view, this is an important milestone for the company — not least because it sends the signal that the fate of department stores does not have to be one of permanent decline."
Spring, the former head of Bloomingdale's, has successfully applied "his merchant-first thinking to the rest of the Macy’s business," according to Saunders.
"This has resulted in Macy's department stores showing up better for the customer," he said. "The clutter and disarray that used to plague shops has gone. In its place is a much more service-oriented environment where assortments are logical, presentation is better, and more inspiration and ideas are offered up. Over the holidays, Macy's pulled out all the stops to entice with stronger displays (including new, classier holiday decorations) and strong gift and apparel ideas. This won it new customers and an improved share of customer spending."
Macy's declined to comment specifically on Saunders' comments, instead referring CoStar News to its fourth-quarter and full-year press release.