Macy's to close 100 stores

[mtraininjax]

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.
Rep

Auto Loans are slipping, as Ford and GM have stated, their loan departments have seen a 30% increase in auto loan defaults over the last year. This could be the next bailout. Did you know that the average age of a car on the road is 11 years now? So places like Autozone and Discount Auto Parts are thriving as people hold onto their vehicles longer, and they last longer too.

I agree, when you see Auto companies offering 0% and willing to pay your first 3, 5 or longer payments, you know they are trying to bring in the last set of customers who have been kicking tires.

In 5 years, I don't believe Everbank will be in Jax. Banks not HQ'd in Jax with ownership in Jax, don't stay. Jax has that track record.

About Macy's and retail, CNBC discussed it yesterday, that the Malls that have a Microsoft Store or Apple Store, seem to thrive over those with the old Sears or JCPenny stores. Cool Tech Gadget shops and Hottopic/Forever 21 stores (although the one in Jax bailed out) seem to help the malls in suburbia. Belk plans to shut down the Roosevelt store (part of the old Roosevelt Mall, soon to be a church or large roller rink, or hopefully hip-cool residential), and it seems that there is just too much retail space out there:

Macy's takes the lead and finally starts addressing the overstored retail landscape. Macy's CEO Terry Lundgren showed up on "Squawk Box" to talk about his company's earnings this morning, and threw out one of the more interesting stats I've heard this month.

He noted that the United States has 7.3 square feet of retail space per person, while France and Japan both have 1.7 square feet, and the U.K. has 1.3 square feet.

The United States has almost five times more retail space per person than France, Japan and the U.K.? Yep. Lundgren rightly described the situation as "ridiculous."

Lundgren is addressing that by announcing Macy's will be closing 100 underperforming stores out of a base of 728. That is quite a reduction. The annual sales loss could approach $1 billion, but that might be offset somewhat by expense savings.

Macy's will not be the last store to downsize its operations. This bodes problematic for the Sleimans of the world too, as they see fewer and fewer retailers for their strip malls. Soon any business selling products will be outsourced to smart phone, so look for more service agencies to open up shop in the spaces that box stores used to use.

[jaxjags]

Spuwho makes a great point. Macy's is really Federated Dept. Stores. Back 2 decades ago that was several regional brands, such as Lazarus stores in Ohio. Different brands in different regions all under Federated. They bought and sold what was good for that region. Ohio, FL, DC all have different needs and taste. I believe that consolidation did hurt their marketing. If high end stores at SJTC do well it's cause they are smaller and tailor their goods to their market. On line buying has hurt, but many items people still want to see and try. Up scale clothing, furniture, appliances, jewelry, etc.

[I-10east]

The latest list of Macy's store closures includes the closest one to Jax, G-ville's Oak's Mall location. Also a location in DT MIA will close.

http://www.businessinsider.com/macys-stores-closing-list-2018-1

[thelakelander]

I kind of had the feeling that the Miami Macy's was on its last legs. When I stopped in there back in October, half of the six story building had been sealed off already. DT Cincinnati's store is also on the list.

[KenFSU]

I kind of had the feeling that the Miami Macy's was on its last legs. When I stopped in there back in October, half of the six story building had been sealed off already. DT Cincinnati's store is also on the list.

I remember going there when it was still a Burdines.

Sad, but I wouldn't be surprised if it that block is quickly redeveloped and the closure becomes a net win for downtown Miami.

Like you mention, place was a bit of a dump for years now.

[thelakelander]

I believe it will be a win. That building was too large for them and they haven't put much money into it in years. Given DT Miami's population growth, it sits in a pretty great centralized location.

[I-10east]

Many people like to predict the demise of suburban malls (and basically by default their department stores within). IMO the biggest dinosaur of them all is the traditional downtown department store; they make most suburban department stores look very feasible in contrast. IMO downtowns should focus on smaller brand stores, small mom and pops, restaurants and supermarkets.

[thelakelander]

Both concepts are going down. For the most part, downtown department stores took it on the chin in the 1980s and 1990s. I read something the other day that another 300 low performing malls will be on their way to the afterlife if Sears or JCPenney file for bankruptcy this year. Locally, that would kill Regency and leave big holes in Orange Park and the Avenues. With that said, what's happening in DT Miami is interesting. Macy's dies but a new mall opens downtown with a department store of its own. However, unlike a traditional mall, its tenant mix includes food halls as anchors.

As for the suburban malls and strip centers, we have too much retail space. Anything new at this point is simply pulling existing retail and leaving vacant properties somewhere else.

[TimmyB]

Both concepts are going down. For the most part, downtown department stores took it on the chin in the 1980s and 1990s. I read something the other day that another 300 low performing malls will be on their way to the afterlife if Sears or JCPenney file for bankruptcy this year. Locally, that would kill Regency and leave big holes in Orange Park and the Avenues. With that said, what's happening in DT Miami is interesting. Macy's dies but a new mall opens downtown with a department store of its own. However, unlike a traditional mall, its tenant mix includes food halls as anchors.

As for the suburban malls and strip centers, we have too much retail space. Anything new at this point is simply pulling existing retail and leaving vacant properties somewhere else.

That said, though, Target has been trying a new "urban footprint" store for a short while now.  I've seen a couple in just driving by (haven't been in a position to where I could actually get out of the car) and they looked really cool.  Very inviting from the street.  Have you heard how this venture has been going for them?

[thelakelander]

A lot of stores have been experimenting with urban footprints. I'm not sure how Target's experiment has turned out but Walmart gave up and decided to focus on their Neighborhood Market formats instead. The big winners so far are Dollar General and Family Dollar. They've mastered stuffing a bunch of cheap stuff in small spaces.

[pierre]

A lot of stores have been experimenting with urban footprints. I'm not sure how Target's experiment has turned out but Walmart gave up and decided to focus on their Neighborhood Market formats instead. The big winners so far are Dollar General and Family Dollar. They've mastered stuffing a bunch of cheap stuff in small spaces.

Anytime I drive through a rural area, I am amazed at the sheer number of Dollar General stores that have been built. They are essentially the new Wal Mart for low income, rural communities.

[thelakelander]

Funny thing is 25% of their overall sales are made by millennials. They've rolled out an urban format as well called DGX:

The concept is being tested in Nashville as what is envisioned as a discount version of the quick-trip store for urban customers. Think of it as sort of a hip convenience store or corner market.
There are similarities between a traditional Dollar General store and DGX, but the smaller-format store features a more modern design, a curated selection of goods and a brewed coffee station for metropolitan shoppers.
The store has a 3,400-square-foot sales floor in a portion of the former TGI Friday's restaurant space.

https://www.google.com/amp/s/amp.usatoday.com/amp/97357488

[TimmyB]

A lot of stores have been experimenting with urban footprints. I'm not sure how Target's experiment has turned out but Walmart gave up and decided to focus on their Neighborhood Market formats instead. The big winners so far are Dollar General and Family Dollar. They've mastered stuffing a bunch of cheap stuff in small spaces.

They must be doing something right.  Their CEO just said two weeks ago that they will open another 100 of them in the next three years.  Ironically enough, the article where I found that shows one of them as the ground floor of a new apartment building, six stories tall.  Kinda what a few people on this forum have been saying we need.

[thelakelander]

If I recall, they were initially targeting first tier urban areas and college towns first. The closest to here is in Gainesville. It just opened in November:

http://www.gainesville.com/news/20171108/target-at-standard-now-open



It's located in the bottom of this building across the street from UF. I think it will be a while before you'll see something like an urban Target in DT Jax. We'll probably see something like a DGX (Dollar General's version) first.

[bl8jaxnative]

Target's been playing with the urban store format for 20 years.   It's always been touted as being the future.  For 20 years it hasn't been.

Target's had a lot of problems the last 5 years and took a beating on the stock market.  They've been closing stores, going through layoffs, etc.


That may be true given the shift to on-line shopping.  But it hasn't happened yet.   And if the online component doesn't kick in with all of that, I don't see these stores getting built out.    Target just doesn't have the cash, especially given the intense compeition, to make a go of things being a small sales org.