Macy’s Inc. will open 30 new small-format stores by the fall of 2025 as it works to expand its presence outside of traditional malls.
(Bloomberg) — Macy’s Inc. will open 30 new small-format stores by the fall of 2025 as it works to expand its presence outside of traditional malls.
Macy’s already operates small-store locations in markets such as Dallas, Atlanta, St. Louis and Chicago, and it announced four new ones in August. The department store chain will have 15 smaller stores across the Macy’s and Bloomingdale’s brands, which are about a fifth of the size of a typical mall-based store, by the end of the year. The 30 new stores will begin opening in 2024 with locations to be announced.
So far, the smaller stores that have been open for one fiscal year or longer have shown positive same-store sales growth on an owned-plus-licensed basis, Macy’s said Tuesday.
In the last three years, the company has closed about 80 locations, primarily those in struggling malls, as part of a profitability strategy known as Polaris.
Our focus is on “healthy on-mall and off-mall stores and a strong digital business,” Marc Mastronardi, Macy’s chief stores officer, said in an interview. “That’s how we can continue to drive a winning strategy for customers and ultimately growth for the business.”
Retailers including Abercrombie & Fitch Co. and Kohl’s Corp. have adopted similar store strategies, experimenting with new formats and neighborhoods. Abercrombie opened a boutique-style shop in the Lakeview neighborhood of Chicago in 2021 after it noticed a large customer base was making online purchases in that area.
Read More: US Retail Stores Move to Suburbs, in Another Blow to Downtowns
When it comes to choosing locations for the additional stores, Macy’s is prioritizing suburban shopping centers that have high foot traffic tenants like grocery and off-price stores, as well as a Walmart or a Target.
While some of those are competitors to Macy’s, the company sees an opportunity to offer merchandise from brands like Nike, Levi Strauss and Chanel, as well as its own private label brands, which makes its mix unique. There’s been “a ton of interest from landlords,” Mastronardi said.
Macy’s shares dropped 44% for the year to date as of close of trading on Monday. Macy’s may surpass its financial projections for the full year if its promotions in the second half outweigh the impact of student-loan payments resuming, according to Bloomberg Intelligence analyst Mary Ross Gilbert.
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