Wednesday, January 4, 2017

Macy's, Kmart and Sears Closures... Oh My!

Metro Atlanta spared in latest round of closures. 

Cincinnati,OH based Macy's today confirmed another 59 stores it plans to close in the coming months.  Today's news comes on the heels of an earlier announcement of nine other stores it had either already closed or was about to liquidate. While  retail observers speculated that Macy's stores in Savannah's Oglethorpe Mall and Peachtree Mall in Columbus were "most likely to close," neither was included in this round of closures.  (Last year's announcement was for  "100 store closures," and with this recent news bringing the confirmed count to 68, there could still be more closures to come.)

The only Georgia store slated for closure is at Georgia Square Mall in Athens.  Opened in 1981, the 121,000 square foot two level Macy's store was included in a list of "Year-End Closings." Although no closure timeline was provided, a store employee with whom I spoke indicated that the store will be closed by early March.  Georgia Square Mall is owned and operated by Atlanta based Hendon Properties, which until 2014 owned North DeKalb Mall in Atlanta, where Macy's closed its store early last year.  

In addition to the Savannah and Columbus stores, there was speculation that Macy's stores at Gwinnett Place Mall, Northlake Mall, Arbor Place, South DeKalb Mall and Greenbriar Mall could be included in the closure announcement but all seem to have survived...for now.  

One curious inclusion in the list of closures was the 188,000 square foot Macy's in Kenner, LA at The Esplanade.  The Kenner store, located in the greater New Orleans area, first opened in 1986, but closed in 2005 after suffering severe damage from Hurricane Katrina.  The mall also suffered damage but reopened a few months after Katrina, in late 2005.  Macy's reportedly went back and forth on its plans to reopen at the mall before officially making its announcement in 2007 and reopening in 2008. “Returning to the New Orleans market has been a top priority for us,” said Ed Holman, chairman and CEO of Macy’s South at the time of the announcement.  Clearly things have changed.  

The two oldest stores on the closure list are the the downtown Minneapolis store which first opened as Dayton's in 1902, and Eastland Center in Harper Woods, MI, which opened in 1957 as Hudson's.  

The newest stores on the closure list are the Macy's at Nampa Gateway Center in Nampa, ID, which opened in 2009, and the Kenner store which (re)opened in 2008.  

In addition to the downtown Minneapolis store which Macy's sold for over $40 million, the company is also closing its downtown Portland, OR store, which opened in 2007. The Macy's on Peachtree Street in downtown Atlanta, originally Davison's, closed in 2003. 

The retail giant said it will also be cutting "layers of management'' at its central operations, and paring down the number of managers at individual stores, leading to a loss of roughly 6,200 more jobs.

"We continue to experience declining traffic in our stores where the majority of our business is still transacted,'' Terry Lundgren, Macy's CEO said in a statement.  With regard to the store closings he added, "we are closing locations that are unproductive or are no longer robust shopping destinations due to changes in the local retail shopping landscape...These are never easy decisions.''

Lundgren, who has been at the company's helm since 2003, will step down as CEO later this 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.

The complete announcement from Macy's can be found here.
In other retail news, Hoffman Estates, Illinois based Sears Holdings, the parent company of Kmart and Sears, also announced plans to close 150 stores (108 Kmart stores and 42 Sears) by April. In the case of Sears and Kmart, metro Atlanta was again spared from the closure list but Savannah and Columbus were not so lucky.  

Kmart stores at 33 W. Montgomery Cross Road in Savannah, 3200 Macon Road in Columbus, 365 Habersham Village Circle in Cornelia and 1601 Highway 40 East in Kingsland are all slated to close.  In addition, Sears stores at Albany Mall in Albany and Columbus Park Crossing in Columbus are expected to close.  

This latest round of closures will bring the total number of stores that Sears Holdings has closed this fiscal year to more than 200.  These moves will leave the company with fewer than 1,500 stores by mid 2017,  down nearly 60% from 2011, when Sears [Holdings] had more than 3,500 stores.

Business Insider's report including the full list of store closures can be found here.

8 comments:

Anonymous said...

After visting the Esplanade Mall in Kenner, LA this past fall, it was of no surprise to me that Macy's wanted out. Even though the mall bounced back after Katrina, the recession did a number on the mall which has sent it into a death spiral. Dillard's was the first shoe to drop when they consolidated their 2 stores into the former DH Holmes and converted into a clearance center on the lower level. Then Target demolished the former vacant Mervyn's and built a brand new store in its place. Demographics and proximity to Lakeside in Metairie stole the remaining thunder as stores began to close one by one until the mall was dead and littered with secondary stores filling in space selling everything from vapes to health insurance. Even Macy's only used 2 of the 3 floors in their location and is likely close to the expiration of any incentives that lured them back into the New Orleans area. With their thriving store at Lakeside, there's the perfect way to cut their losses and focus all of their attention going forward.

Coolio said...

There will be more of these, because the idiots that run these places refuse to adapt to the new way of doing business. How can you compete against Amazon and their logistical infrastructure when you have so much overhead in terms of buildings and employees?

I have said this before, and I'll say it again: the best thing these places to do is to rebuild their brands to be a mixture of shopping and entertainment. Have more events where local artists can come perform and offer sales in conjunction with that event. Figure out a way to make department stores a destination rather than only a necessity when time is of the essence. Build a few coffee shops on the interior of the place so people have to walk past clothes to get there, and maybe have some pop-up discounts for the people who use the Wifi there.

It took me like 2 minutes to think of those ideas, imagine what more can be done with days, weeks and months, and actual focus groups. People want to shop somewhere cool, and with names like JC Penney, Sears, kmart Macy's, there isn't any more uncool places to shop these days, especially since they closed Woolworth and Montgomery Wards.

Wait...Hamricks...I forgot about them. SO uncool to shop there. *YAWN*

Ham said...

Obviously no surprise that more closures were announced, but a little surprised they closed the only store in Athens while leaving the North Lake and Gwinnett Place stores open. I suspect there are some small signs of hope for the North Lake area, but Gwinnett Place seems years away from any real revitalization CID or not.

While I don’t think traditional retail is totally dead I agree it needs to be rethought and condensed. There are way too many malls and way too many department stores around the metro area. Every time I visit Lenox or Perimeter they seem to be packing them in, so there is a market just not for the current number of malls/stores.

Anonymous said...

I don't want an experience or entertainment while I shop for clothing I just want decent well made clothing and most stores don't carry that. I also don't want to rely on the internet for clothing because that is the one thing that I want to see, feel, and try on - not chance with a 75% return rate. The middle class consumer has been forgotten. Tacky cheap clothes make consumers look cheap and tacky. Most people that buy luxury brands are conspicuous consumers loaded with debt. I work on lending and you would not believe how people mishandle their money and are saddled with huge debt. Lessons were not learned since the great recession, and consumers demand for value and quality are killing these stores. These stores would rather cower to politically correct non customers instead of the people who would actually spend money in their stores. Lessons not learned from same mistakes over and over.

Anonymous said...

Is there any truth to this report ---
http://news.wabe.org/post/federated-closing-several-atlanta-macys-stores

Atlantan99 said...

@Anon RE WABE article,

Yes there was truth to that article...when it was published in 2003!


Thanks for your comments and readership.

Anonymous said...

Target will be next to announce store closings

Coolio said...

Target seems to be in good shape. Why would you say there are gonna be closings @ Anon 9:32 AM