People shop at the Macy’s store on Herald Square on January 19, 2024 in New York City. 

Michael M. Santiago | Getty Images News | Getty Images

As Macy’s chases sales growth, the department store operator said Tuesday that it will close about 150 of its namesake stores and open more shops with better locations or a luxury focus.

The changes reflect a focus on what’s working at Macy’s — higher-end department store Bloomingdale’s and beauty chain Bluemercury — and what’s not — its namesake stores, particularly the ones at struggling malls. In its holiday quarter results posted Tuesday, the retailer said its Macy’s department stores performed worse than both Bloomingdale’s and Bluemercury.

As it reported earnings, Macy’s shared its strategy for the future. The strategy shift comes weeks after former Bloomingdale’s CEO Tony Spring started as Macy’s CEO earlier this month.

Macy’s had already announced in January that it would close five namesake stores and lay off more than 2,300 people.

In a CNBC interview on Tuesday, Spring said the company is shaking up its store footprint after taking a hard look at which stores are in the right spots — and which are not.

“We have some stores that are just underproductive or not as profitable, and we have to address that,” he said. “Conversely, we have stores that are highly productive and highly profitable. We have markets and stores and centers we’re not in today that we’d like to be in.”

Here’s a closer look at Macy’s major store announcements, broken down by store brand.

Macy’s

Sales at Macy’s namesake stores have lagged the most — and that business will see the biggest changes.

The company plans to close about 150 stores, including 50 that will close by early 2025. It has not shared those locations, but said they are “unproductive.”

The stores that it had already said would be shuttered are located in Arlington, Virginia; San Leandro, Calif.; Lihue, Hawaii; Simi Valley, Calif. and Tallahassee, Florida. The stores will close early this year.

On the other hand, Macy’s said it will boost investments in the roughly 350 namesake locations that will remain open.

For example, Spring said in an interview with CNBC that the company is testing how it can improve customer service at 50 of its stores. In the most recent quarter, it added or moved employees to different roles in those locations, such as by offering more support in the fitting room and shoe department.

The company is also pressing ahead with its strategy of opening smaller Macy’s stores in suburban strip malls. Last year, it announced it would open up to 30 of the shops over the next two years. The locations are roughly one-fifth the size of its traditional mall stores.

Spring told investors on an earnings call that there is a sharp difference between the Macy’s stores the company is closing and the ones that will remain open. The 150 stores that will shut represent 25% of Macy’s square footage, but less than 10% of its sales, he said.

“They’re underproductive and we have to focus on making sure that we have the best stores, not the largest number of stores,” he said on the earnings call.

Along with considering the economics, he said a team at Macy’s spent about six or seven months evaluating stores based on other factors, including customer demographics, digital demand and the condition of the store or shopping center.

As of Feb. 4, Macy’s had about 500 namesake stores. Most are its typical mall locations, but that total also includes some of its smaller shops and freestanding locations of Macy’s off-price banner, Backstage.

Bloomingdale’s

Bluemercury

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