Macy's to close 100 stores

[mtraininjax]

Don't look for a Macy's anywhere near NE Florida anytime soon....

http://www.cnbc.com/2016/08/11/macys-reports-second-quarter-earnings.html

Macy's reported Thursday fiscal second-quarter sales and earnings that topped analysts' expectations, as shoppers responded to the department store's steep discounts. Yet with sales still on the decline, the retailer said it will shutter 100 locations to focus on its best-performing stores.

[FlaBoy]

They have 8 stores in Tampa Bay (Pasco, Pinellas, and Hillsborough) alone. They may think it is smart to bring one store here at some point.

[thelakelander]

Most of the Bay Area stores are former Burdines stores. Prior to Burdines, they were Maas Brothers. Mass Brothers was a chain based out of Tampa.


The former flagship store in Downtown Tampa. Unfortunately it was demolished for a redevelopment project (about 10 years ago) that failed to materialize.

A picture of the old store I took right before it was demolished. The site is a surface parking lot today:

[Kerry]

I suspect the US is getting ready to enter a pretty substantial economic downturn.  The 100 stores Macy's is closing are all profitable, but they are doing it now because they don't expect them to be profitable next year (or for the foreseeable future).  Their outlook must be pretty negative to take that kind of step.  I always watch auto-loans as a gauge for the future economy.  When auto loans are offered at 0% interest red flags start flying like crazy for me, and one can now get a 0% loan for 72 months with $0 down.

TIFF buying EverBank is another ominous sign to me.  To get future bailout money they are required to have a banking component.

[vicupstate]

I don't know that Macy's closing stores is indicative of anything more than a shift in how and where we buy things. Malls and Department stores are clearly past their high water mark. That Sears is still around surprises me more than anything.

I am not a 'hipster' by any means, and changing my habits takes time, but I can't remember the last time I walked into a Department store.  That despite literally working across the street from a large and still successful mall.   

[Snufflee]

It is a combination of changing shopping habits as well as high end designers clamping down on the practice of retailers steeply discounting inventory. Coach/Polo just to name 2 in their latest earnings call have called that practice a drain on their revenue and would prefer to pedal their wares in fewer locations than risk over exposure in the market forcing clearance rack sales.

[Steve]

Amen. Macy's has too many stores. Between 1990 and 2005 they gobbled up a TON of competitors and thus they have markets like Tampa Bay where they have 8 stores.

I don't think the economy is as strong as it should be, but I think what's happening to Macy's is what's happening to a lot of Brick and Mortar stores. Macy's is also lagging behind in their omnichannel strategy. I thought these two paragraphs were telling:

Nearly all the stores are cash-flow positive, but "their volume and profitability in most cases have been declining steadily in recent years," said Macy's President Jeff Gennette, who will assume the CEO role from Lundgren in 2017. In some cases, the stores are not performing worse than the overall fleet, but their potential value from redevelopment exceeds their value as a retail store.

Macy's will also close a few stores where there is another location nearby. After these stores close, the retailer will retain a physical footprint in 49 of the top 50 U.S. markets based on population. The company will use the savings from its store closings to focus on its "highest-potential locations," and invest "more aggressively in digital and mobile," Gennette said.

I think this is a slow (not sure why they were so slow to realize) reaction to the fact that their footprint is not what it should be. I also think that they are about to start doing large scale refreshes of their stores (probably a good strategy), and if you're going to do that, you might as well close the stores that you don't want to invest in.

I guess Jacksonville is the only market in the top 50 without a store.

[Steve]

Also, nothing says that all 100 stores are Macy's-branded stores. Macy's, Inc. owns a few other brands too.

[FlaBoy]

Most of the Bay Area stores are former Burdines stores. Prior to Burdines, they were Maas Brothers. Mass Brothers was a chain based out of Tampa.


The former flagship store in Downtown Tampa. Unfortunately it was demolished for a redevelopment project (about 10 years ago) that failed to materialize.

A picture of the old store I took right before it was demolished. The site is a surface parking lot today:

What a shame. They pretty much just labeled the building as unsafe and demolished it very quickly to build a new condo building. Now it is a parking lot. I am surprised someone has not scooped it up yet to build on.

[spuwho]

All those stores they absorbed had the power of local or regional buyers. This meant they could tailor their products to the local tastes.

But when Macy's was cutting costs, they eliminated all those regional and local buyers and centralized everything in New York.

How can a textile or merchandise buyer in New York know what the trends are in Ocala, Florida, let alone Bozeman, Montana?

My spouse loves their professional womens wear, as they are difficult to get in greater Jacksonville. So she typically drives down to Millenia in Orlando or Mall of America.

They could easily eliminate 4 of those Tampa area stores and create 1 Jacksonville store. But I bet they are stuck in a lot of leases from the 1990's that have yet to expire and so they holding out until they do.

But its clear they are either losing touch with their market or they are shrinking to what the market will support.

[jaxlongtimer]

Here is another way to look at things...

In Jax, we haven't gotten Macy's, may be losing Kmart & Sears, but gaining Amazon.  I think that may be the story in a nutshell.

Would be curious to know what Dillards and Nordstrom think of the area.  Nordstrom apparently hedged their bets here as I am told the Jax store isn't full size and, thus, doesn't carry some of the lines they carry elsewhere.

I have heard the high end specialty/luxury retailers at Town Center are doing well. Seems those who tightly control their retail channels (e.g. brands that operate their own boutiques like Louis Vuitton where they absolutely do not discount or put items on sale I am told) are fairing better than those that are more broad-based, and thus, less exclusive.

[FlaBoy]

The world is becoming ever more niche rather than broad based appeal whether clothes, movies, television, music, or entertainment. Football might be the last thing that brings us all together. 

[spuwho]

Here is another way to look at things...

In Jax, we haven't gotten Macy's, may be losing Kmart & Sears, but gaining Amazon.  I think that may be the story in a nutshell.

Would be curious to know what Dillards and Nordstrom think of the area.  Nordstrom apparently hedged their bets here as I am told the Jax store isn't full size and, thus, doesn't carry some of the lines they carry elsewhere.

I have heard the high end specialty/luxury retailers at Town Center are doing well. Seems those who tightly control their retail channels (e.g. brands that operate their own boutiques like Louis Vuitton where they absolutely do not discount or put items on sale I am told) are fairing better than those that are more broad-based, and thus, less exclusive.

Agreed on Nordstroms. Outside of womens shoes, friends from out of town call it "Nordstrom Lite" for its rather slim selection.

[thelakelander]

^I wouldn't know. I've never been in the place. However, I'm not a mall guy. My mom was a shopaholic, so after living in malls in the 80s and 90s, I avoid them like the plague today.

[Sentient]

Here is another way to look at things...

In Jax, we haven't gotten Macy's, may be losing Kmart & Sears, but gaining Amazon.  I think that may be the story in a nutshell.

Would be curious to know what Dillards and Nordstrom think of the area.  Nordstrom apparently hedged their bets here as I am told the Jax store isn't full size and, thus, doesn't carry some of the lines they carry elsewhere.

I have heard the high end specialty/luxury retailers at Town Center are doing well. Seems those who tightly control their retail channels (e.g. brands that operate their own boutiques like Louis Vuitton where they absolutely do not discount or put items on sale I am told) are fairing better than those that are more broad-based, and thus, less exclusive.

Agreed on Nordstroms. Outside of womens shoes, friends from out of town call it "Nordstrom Lite" for its rather slim selection.

"slim" in variety, not sizing...