In a decisive pivot towards luxury retail and smaller store models, Macy's announced it will be closing 150 of its department stores, marking a significant reduction in its retail footprint. According to a CNN report, 50 Macy's locations are slated to shut down by the end of 2024, with the remainder to follow gradually. By 2026, the company expects to operate just 350 stores, compared to the current 387 Macy's outlets under its corporate umbrella.

The move to shutter these stores, as revealed by Macy's, is a strategic step not merely to scale back but to also significantly reshape its business model in response to changing consumer behaviors. An article by WFTV noted that the targeted closures represent a mere 10% of the company's total sales, which suggests a calculated effort to eliminate outlets that underperform. Macy's described this strategy as embarking on "a bold new chapter" in its ongoing retail saga.

In a shift towards more upscale retailing, Macy's is looking to enhance its higher-end brands, Bloomingdale's and Bluemercury, which have been outperforming the flagship brand. This change comes as the retailer aims to cater to a new demographic. As explained by the KIRO7 article, consumers have gravitated toward retailers like Walmart for more cost-effective shopping, while still seeking out luxury items that high-end stores provide.

The department store giant is also planning to build 30 smaller stores in the next two years, cautiously moving away from traditional mall settings. According to CNN, these locations are not just reflective of consumer preferences for convenience, but they also prove to be more profitable due to lower operational costs, including reduced staffing requirements and leaner inventory management.