Macy’s announced on Tuesday its intention to close approximately 150 underperforming stores within the next three years, marking the struggling retailer’s latest move to revitalize its business amid efforts to stave off a proposed takeover by activist investors.
The department store chain outlined its strategy to concentrate on the expansion of its luxury brands, Bloomingdale’s and Bluemercury. Macy’s will shut down 50 stores within the coming year.
Overall, the restructuring initiative will leave Macy’s with 350 outlets. The specific locations slated for closure were not disclosed by Macy’s, as stated in an email to CBS MoneyWatch.
The decision to close stores follows Macy’s rejection last month of a $5.8 billion takeover bid from investment firm Arkhouse Management and its partner Brigade Capital Management. Financial entities have shown interest in Macy’s, partly due to its multibillion-dollar real estate portfolio, which some believe is undervalued in the stock market.
Neil Saunders, an analyst at GlobalData, emphasized in a research note on Tuesday that this new plan, emerging shortly after Macy’s rebuffed the takeover offer, aims to provide “a positive narrative” crucial for reassuring investors.
Macy’s CEO Tony Spring, who assumed the role earlier this month after nine years of leading Bloomingdale’s, articulated that the closure of underperforming stores is anticipated to contribute to stabilizing Macy’s sales over time. The focus will be on enhancing customer service and updating product lines.
