|Macy's likely to disappear from more metro Atlanta malls|
Department store announces new store closures
Cincinnati-based Macy's announced yesterday plans to close 100 of its Macy's department stores by early next year. A closure list has not yet been made public but it's likely that Georgia's stores will be affected. Much like last year's 36 store closures, Macy's will likely close most of the affected stores after the busy holiday shopping season. The longtime Rich's turned Macy's store at North DeKalb Mall was one of the 36 stores that previously closed.
(The former Macy's at North DeKalb Mall continues to sit vacant and idle as a deal with Costco Wholesale remains "in the works" but not complete.)
Macy’s operates 728 stores in the U.S. and the closures will amount to about 15 percent of its domestic locations. Macy’s said it will retain operations in 49 of the Top 50 U.S. retail markets. (The release did not specify in which top market it is not represented.)
Macy's stores likely to be considered for closure in metro Atlanta include those at Greenbriar Mall, South DeKalb Mall, Gwinnett Place Mall and The Mall at Stonecrest. The Macy's at Northlake Mall is not likely to close entirely but is likely to shrink is size following what is expected to be a complete overhaul by new mall owner ATR Corinth. (Kohl's closed at Northlake Mall earlier this year.)
“Nearly all of the stores to be closed are cash flow positive today, but their volume and profitability in most cases have been declining steadily in recent years,” Macy’s President Jeff Gennette said. “We recognize that these locations do not yield an adequate return on investment and often do not represent a customer shopping experience that reflects our aspirations for the Macy’s brand. We decided to close a larger number of stores proactively so we can invest in a winning customer experience in our most productive and highest-potential locations, as well as invest in growth sooner and more aggressively in digital and mobile.”
Macy’s said it will look to capitalize on the value of its expansive real estate holdings, with many of the stores destined for closure being worth more to the company as real estate [to be sold] than as retail operations.
Macy's introduced "Macy's Backstage" earlier this year in an attempt to capture more cost-conscious consumers. The Backstage concept attempts to take cues from sibling concept "Bloomingdale's - The Outlet Store," launched in 2010. Retail analysts have largely panned the new concept with many saying it fails to entice consumers and offers little to differentiate itself from other similar stores. To date there are 16 Backstage stores, 11 of them in the northeast, in New York, Connecticut, and New Jersey. There are currently no Backstage stores (or Bloomingdale's Outlets) in metro Atlanta, but that may change.
Recent Backstage stores, including the three that recently opened in Mesquite, San Antonio, and Fort Worth, Texas, are all located within existing Macy's stores in malls.
"We have to make stores more productive — all of us box stores," Macy's CEO Terry Lundgren told CNBC earlier this year. "Customers buying online have got to find more reasons to visit."
Macy's and many other big box retailers have been hit hard by the likes of Amazon and eBay as consumers often browse in-store but make purchases from other online merchants.
Lundgren, who has been at the company's helm since 2003, will step down as CEO next year. Jeff Gennette, 55, who was elected President of Macy's in 2014, will assume the CEO position during the first quarter. Lundgren, 64, will continue as executive chairman and work alongside Gennette for an undetermined amount of time.
Macy’s reported its sales in the second quarter were down nearly 4 percent to $5.87 billion compared to the same period last year.
What local Macy's do you think will close? What would you like to see open in place of would-be Macy's closures in metro Atlanta? Have you been to a "Macy's Backstage?"
Please share your thoughts below.