Macy's to shutter 150 underperforming stores by 2026

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In addition to posting its fourth-quarter earnings, Macy's (M) new CEO Tony Spring has announced an initiative he calls "a bold new chapter" in which the retailer will close 150 "underproductive" Macy's locations, which includes 50 stores by this year's end. As part of the initiative, the retailer will open 15 Bloomingdale's and 30 Bluemercury stores in the next three years.

Yahoo Finance Retail Reporter Brooke DiPalma joins the Live show to break down the latest development for Macy's and what it could mean for the company moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

Video Transcript

BRAD SMITH: Well, let's continue to talk about Macy's this morning. Macy's shares slipping on the back of its fourth-quarter results where the retail giant announced a new initiative that includes closing 150 locations through 2026. Yahoo Finance's Brooke Dipalma has the details here. Ticker symbol, M, we're tracking that this morning, Brooke.

BROOKE DIPALMA: Ticker symbol M. And it's day 23 for the new. CEO, Tony Springs, so quite a lot that he's walking into. I mean, this comes as he approaches Macy's with what he says an outsider point of view after coming from Bloomingdale's where he served as CEO since 2014. And joined Bloomingdale's right out of college back in 1987.

But, like I said, lots happening over at the ticker M at Macy's. They recently rejected a $5.8 billion buyout offer from one of its shareholders Arkhouse. They now nominated nine candidates for Macy's board of directors last week in a proxy battle. And he also hinted at a slowdown among its consumer. He said the consumer is expected to remain under pressure, especially as inflation has slowed but so has labor and wage growth.

And now this company out with this bold new chapter. Its chapter, its growth strategy where the CEO Tony Spring said it has been its own toughest critics. It has challenged the status quo, and it has identified what it got right and wrong and work is already underway. And if you could see here, these are some key tactics of that bold new chapter, including right sizing Macy's portfolio, closing 150 stores by 2026.

He said that the economics there just made sense. They are set to close 50 this year with what they're calling non-go-forward locations. Now, this will be roughly 350 remaining Macy's stores. They're calling those go-forward locations. And they'll still be inclusive of a full line of furniture as well as smaller formats.

They said that those 150 underproductive stores are set to close, like I said, 50 by the end of this year, but they said that it took roughly six to seven months to really evaluate their portfolio. They ran a complete diagnostic looking at demographic, digital demand, the condition of the store.

And in addition to that, they're also really trying to unlock value for shareholders by leaning into that omnichannel approach that we've seen do so well for companies like Amazon, like Walmart. They're really trying to rationalize and monetize their supply chain, lean into digital even more, so streamline fulfillment, and offer a scalable tech platform in the coming years. Of course, the pressure is on as Amazon and Walmart continue to gain share.

SEANA SMITH: And true. They're huge rivals out there. Right. Brooke, thanks so much.

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