Macy’s 2025 Closure List

[ClownLoach]

So this is what it is... they are basically forecasting these stores are going to float into the red. Some of them stay open longer than expected since they don't actually "float into the red."

I think they need to take a hard look at some of what they are doing. For instance, in Sacramento, I do not believe all of the sales they are walking by closing the 2 boxes at Sunrise and the 1 giant box in Downtown Sacramento will transition over to the inadequate smallish store they have on Arden or all the way out to the overcrowded/over capacity A+ mall in Roseville where they also have a store that is not as big as it could be. I know the problem in Sacramento is Sunrise probably still is a viable location for one box (not two) but the mall is dead and redevelopment is imminent.

I see a similar situation with their closure decisions in Oregon.

This is the same problem as San Diego. Their best shopping centers for the future have the smallest and arguably worst Macy's buildings. Massive remodels gutting them to the bare walls and starting again would probably resolve the issue, but can Macy's afford that? I don't know if they can, and the "store within a store" concept that JCP and Best Buy attempted in the 2010s to get vendors to pay to remodel a section at a time does not seem to get traction anymore in retail. Apparel companies would rather just go DTC and be done with it so they can get better margins back to go with their investment in space.

To take this a step further, I question how what they are doing impacts their whole "ship online orders from stores" strategy. Again using the Sacramento example- I do not think either of the two remaining stores are good candidates to ship from store. Arden is too small and missing items/categories due to size (doesn't even get Christmas stuff, no space), and Roseville is such a busy store that it seems like a waste to ship from store there but F50 so it should have plenty of product to be shipping.

I think the small store size is a problem. As they have fewer stores in an area, they need larger stores, not smaller stores... unless they plan to exit certain categories entirely (home?)...

We also don't know how much redundant back room, office, fitting room, etc. space there is in these stores that could be reclaimed as selling area, so maybe they could magically find a lot of extra space in the remodels. But my understanding is they have been using more of that previously excess space for the online ordering ship from store program.

I do wonder if the apparel companies will get off this DTC phase and go back to favoring retailers again. I kind of don't think they will. My suspicion is customer satisfaction goes up with DTC.

The old Union Square Men's Macy's buildings had various of those brand themed/built "shops." This was before JCP did it. Some of that was sort of preserved when they closed that building and moved Men's into the main building. Haven't really seen that in another Macy's (outside the Cosmetics areas).

DTC has already torched Nike and cost the CEO his job, now they're pivoting back to wholesale and Macy's specifically.

[ClownLoach]

Agreed. There is no other rational reason to spread the pain over three years. Why keep money losing stores around longer than needed. Not to mention the publicity hit.

They have stated repeatedly that the entire fleet is profitable and all money losing stores were closed in the previous wave. Doesn't mean these next closures won't go into the red soon, but they're not keeping money losing stores.

Corporate statements about profitability usually aren't credible. They don't want to say a store is unprofitable even when they close one that doesn't have any customers. What seems more likely is that they are surveilling the real estate market. They have publicly stated that they are looking at the real estate value of locations and I believe this has been discussed before---short term cash but not necessarily long-term performance.

There are now numerous malls with various plans for redevelopment, ranging from re-tenanting or converting space (usually where Sears was sitting) to residential to complete redevelopment of the mall property. These can take many years to get going because of local zoning and other hurdles, financing, etc. The potential value of a store is probably not apparent until plans have reached a certain level of viability. I've noticed that Macy has been the last to leave a some malls that are up for complete redevelopment like Lakeforest in suburban DC and Gwinnett Place in suburban Atlanta--I could imagine them sticking around as long as possible to get a good price for their real estate. There are only so many malls that can take the pretty common steps of replacing an anchor with 2 or 3 big boxes or tearing it down for restaurants. The latter seems to happen with smaller anchor spaces like Lord & Taylor and other boutique-ish stores. Now that big box and off-price stores are shrinking their store sizes, it may be more difficult to fill space with big boxes and in much of the country they're at saturation any way. I don't see Costco going into malls in any big way---I did a search and they've closed one store in Arizona and I don't think they've added any new ones since they opened in Wheaton, MD. They do build on outparcels or nearby to malls but they've been doing that for decades. Given all that, I would imagine, Macy is looking at the limited number of spaces that landlords could easily fill with something else and a lot depends on whether the rest of the mall remains viable.

Short version--making real estate decisions requires consideration of when to sell (be the last out of a truly dead mall if you can get more from a developer), where to sell (low volume locations that can be filled with something else) and probably whether or not to remain in a market. This sort of thing takes time because redevelopment is a time consuming process and some things like adding residential may or may not work. Macy's haven't closed huge numbers of stores in the past few years, even where their stores seem dead, and I wouldn't be surprised if they've been trying to maximize value from real estate while running quite a few stores on fumes (understocking and staffing to stay near break even).

Some of their moves may be outside of this, like leaving small markets. JCP has done the same and the threshold for having profitable stores is likely to be different than it was 10 or 20 years ago.

Profitability statement is in earnings reports. Lie there and you get a one way ticket to Club Fed prison. That statement would cause a material impact to the stock price.

I don't disagree with the rest. No matter what, they're running from death.

[storewanderer]

They have stated repeatedly that the entire fleet is profitable and all money losing stores were closed in the previous wave. Doesn't mean these next closures won't go into the red soon, but they're not keeping money losing stores.

Corporate statements about profitability usually aren't credible. They don't want to say a store is unprofitable even when they close one that doesn't have any customers. What seems more likely is that they are surveilling the real estate market. They have publicly stated that they are looking at the real estate value of locations and I believe this has been discussed before---short term cash but not necessarily long-term performance.

There are now numerous malls with various plans for redevelopment, ranging from re-tenanting or converting space (usually where Sears was sitting) to residential to complete redevelopment of the mall property. These can take many years to get going because of local zoning and other hurdles, financing, etc. The potential value of a store is probably not apparent until plans have reached a certain level of viability. I've noticed that Macy has been the last to leave a some malls that are up for complete redevelopment like Lakeforest in suburban DC and Gwinnett Place in suburban Atlanta--I could imagine them sticking around as long as possible to get a good price for their real estate. There are only so many malls that can take the pretty common steps of replacing an anchor with 2 or 3 big boxes or tearing it down for restaurants. The latter seems to happen with smaller anchor spaces like Lord & Taylor and other boutique-ish stores. Now that big box and off-price stores are shrinking their store sizes, it may be more difficult to fill space with big boxes and in much of the country they're at saturation any way. I don't see Costco going into malls in any big way---I did a search and they've closed one store in Arizona and I don't think they've added any new ones since they opened in Wheaton, MD. They do build on outparcels or nearby to malls but they've been doing that for decades. Given all that, I would imagine, Macy is looking at the limited number of spaces that landlords could easily fill with something else and a lot depends on whether the rest of the mall remains viable.

Short version--making real estate decisions requires consideration of when to sell (be the last out of a truly dead mall if you can get more from a developer), where to sell (low volume locations that can be filled with something else) and probably whether or not to remain in a market. This sort of thing takes time because redevelopment is a time consuming process and some things like adding residential may or may not work. Macy's haven't closed huge numbers of stores in the past few years, even where their stores seem dead, and I wouldn't be surprised if they've been trying to maximize value from real estate while running quite a few stores on fumes (understocking and staffing to stay near break even).

Some of their moves may be outside of this, like leaving small markets. JCP has done the same and the threshold for having profitable stores is likely to be different than it was 10 or 20 years ago.

Profitability statement is in earnings reports. Lie there and you get a one way ticket to Club Fed prison. That statement would cause a material impact to the stock price.

I don't disagree with the rest. No matter what, they're running from death.

Keep in mind they can say all stores are profitable but how much "overhead" did they remove from the overhead allocation on these poor performing/dying stores?

Remember that "neighborhood store" program where they took many of these 150 stores closing/slated for closure, cut out staffing, cut out brands, cut hours, cut services, cut loss prevention, etc. to reduce expenses in those stores? Since they were planning to close them anyway... after that is when I recall they came out and said all stores were actually profitable.

There are simple accounting tricks Corporate can use on the overhead allocations to make "all stores look profitable." By the same token and I've seen companies play this game too, they can allocate overhead in a way that makes the "best stores" look "better than they actually are."

[ClownLoach]

Corporate statements about profitability usually aren't credible. They don't want to say a store is unprofitable even when they close one that doesn't have any customers. What seems more likely is that they are surveilling the real estate market. They have publicly stated that they are looking at the real estate value of locations and I believe this has been discussed before---short term cash but not necessarily long-term performance.

There are now numerous malls with various plans for redevelopment, ranging from re-tenanting or converting space (usually where Sears was sitting) to residential to complete redevelopment of the mall property. These can take many years to get going because of local zoning and other hurdles, financing, etc. The potential value of a store is probably not apparent until plans have reached a certain level of viability. I've noticed that Macy has been the last to leave a some malls that are up for complete redevelopment like Lakeforest in suburban DC and Gwinnett Place in suburban Atlanta--I could imagine them sticking around as long as possible to get a good price for their real estate. There are only so many malls that can take the pretty common steps of replacing an anchor with 2 or 3 big boxes or tearing it down for restaurants. The latter seems to happen with smaller anchor spaces like Lord & Taylor and other boutique-ish stores. Now that big box and off-price stores are shrinking their store sizes, it may be more difficult to fill space with big boxes and in much of the country they're at saturation any way. I don't see Costco going into malls in any big way---I did a search and they've closed one store in Arizona and I don't think they've added any new ones since they opened in Wheaton, MD. They do build on outparcels or nearby to malls but they've been doing that for decades. Given all that, I would imagine, Macy is looking at the limited number of spaces that landlords could easily fill with something else and a lot depends on whether the rest of the mall remains viable.

Short version--making real estate decisions requires consideration of when to sell (be the last out of a truly dead mall if you can get more from a developer), where to sell (low volume locations that can be filled with something else) and probably whether or not to remain in a market. This sort of thing takes time because redevelopment is a time consuming process and some things like adding residential may or may not work. Macy's haven't closed huge numbers of stores in the past few years, even where their stores seem dead, and I wouldn't be surprised if they've been trying to maximize value from real estate while running quite a few stores on fumes (understocking and staffing to stay near break even).

Some of their moves may be outside of this, like leaving small markets. JCP has done the same and the threshold for having profitable stores is likely to be different than it was 10 or 20 years ago.

Profitability statement is in earnings reports. Lie there and you get a one way ticket to Club Fed prison. That statement would cause a material impact to the stock price.

I don't disagree with the rest. No matter what, they're running from death.

Keep in mind they can say all stores are profitable but how much "overhead" did they remove from the overhead allocation on these poor performing/dying stores?

Remember that "neighborhood store" program where they took many of these 150 stores closing/slated for closure, cut out staffing, cut out brands, cut hours, cut services, cut loss prevention, etc. to reduce expenses in those stores? Since they were planning to close them anyway... after that is when I recall they came out and said all stores were actually profitable.

There are simple accounting tricks Corporate can use on the overhead allocations to make "all stores look profitable." By the same token and I've seen companies play this game too, they can allocate overhead in a way that makes the "best stores" look "better than they actually are."

Where they get in trouble though is the overhead should be a flat percentage per store. If they manipulate that I don't believe it survives current reporting standards. I agree you can manage payroll, pricing, repairs etc and somewhat manipulate things.

[storewanderer]

Profitability statement is in earnings reports. Lie there and you get a one way ticket to Club Fed prison. That statement would cause a material impact to the stock price.

I don't disagree with the rest. No matter what, they're running from death.

Keep in mind they can say all stores are profitable but how much "overhead" did they remove from the overhead allocation on these poor performing/dying stores?

Remember that "neighborhood store" program where they took many of these 150 stores closing/slated for closure, cut out staffing, cut out brands, cut hours, cut services, cut loss prevention, etc. to reduce expenses in those stores? Since they were planning to close them anyway... after that is when I recall they came out and said all stores were actually profitable.

There are simple accounting tricks Corporate can use on the overhead allocations to make "all stores look profitable." By the same token and I've seen companies play this game too, they can allocate overhead in a way that makes the "best stores" look "better than they actually are."

Where they get in trouble though is the overhead should be a flat percentage per store. If they manipulate that I don't believe it survives current reporting standards. I agree you can manage payroll, pricing, repairs etc and somewhat manipulate things.

I think that depends on the "overhead." Broad based stuff like the regional management costs I think are supposed to get allocated evenly. But even that gets complicated. For instance let's say you are a chain grocer and you have the usual set up of a DM (District Manager), Grocery DM, Bakery DM, Deli DM, etc. But then you have a store with no bakery or deli in the mix. So you won't allocate any of the overhead from the Bakery DM or Deli DM there because that store lacks those departments and those individuals do not visit those stores routinely if at all.

But back to Macys. For instance if they have a "neighborhood store" which has quit shipping .com orders, whatever supervision/systems overhead cost for that service is going to be deleted from that store's profit and loss statement. Not sure what else they cut at a corporate level out of those stores. But I think they had to do some pretty serious cuts to make some of those profitable.

[greenfalcon]

I agree they kept some stuff open they shouldn't have. A little surprised with this list actually.

Tracy, Stockton, Redding, and Fresno River Park staying open...?

Went into the Stockton location today and ventured upstairs, the roof and ceiling are in poor shape. It is a hard capped ceiling with discoloration and unpainted patches all over, trash cans on the floor collecting water.

Records show that Macy's owns this parcel. Not sure what the future holds as the mall owner botched the de-malling.

[storewanderer]

I agree they kept some stuff open they shouldn't have. A little surprised with this list actually.

Tracy, Stockton, Redding, and Fresno River Park staying open...?

Went into the Stockton location today and ventured upstairs, the roof and ceiling are in poor shape. It is a hard capped ceiling with discoloration and unpainted patches all over, trash cans on the floor collecting water.

Records show that Macy's owns this parcel. Not sure what the future holds as the mall owner botched the de-malling.

This type of lack of upkeep just gives the impression they do not care. With a building that age, the mold and other issues presented by this type of lack of upkeep are especially troubling. Even Ross maintains facilities better than this.