If you haven’t caught up with recent retailers news, several well known retailers have been announcing new plans and strategy to compete with e-retail giant Amazon.com. You can jump straight to these news down this article.
The most recent move is from department retailer Macy’s. According to USA Today, Macy’s just recently announced their plan to shutter 100 stores across the nation within the next year. The move comes amidst the sliding Macy’s sales but the company has hopes for their online retail strategy along with their off-price locations, Macy’s Backstage.
Macy’s has yet to officially announce which locations are closing but CNN Money reports that Macy’s plan to keep its best performing locations open and introduce an array of exciting new brands at these branches.
Despite the project loss of at least $1 billion in annual sales from the upcoming closure of these locations, analyst and investors are optimistic about the change. They see it as an essential move for Macy’s to reinvent it's top performing location, enhance current talents and improve their successful online and off-price retail game plan. Despite keeping these popular locations open, some suspect that Macy’s may consider eventually introducing other tenants or vendors into these location to encourage in-store foot traffic. Neil Saunders, CEO of research firm Conlumino notes that despite Macy’s plan to reinvent itself, it also comes as a sign of defeat and realization.
“Macy's has simply not bothered with a large rump of stores for many years: they have lacked investment, been devoid of management attention, and now look distressed and dispirited.”
Source: USA Today
Online sales growth has seen a tremendous spike in recent years and looks to continue this trend in the coming years. Projected sales growth in the next few years through 2020 is expected to hit as high as $684.2 million. With the recent activities of major retailers to scale back brick and mortar locations, we can expect a flurry of new online tactics from major retailers in the coming months as we approach holiday season.
The 100 Macy’s store closures will also be a hard hit to current Macy’s team members and Macy’s plans to offer members impacted by closures the opportunity to work at nearby Macy’s location “where possible”. Otherwise, those who are laid off will be granted severance benefits.