Macy's to close 35 to 40 underperforming stores in early 2016

Macy’s plans to close 35 to 40 underperforming stores in early 2016, the company announced Tuesday.

The fate of the two Macy’s stores in Alabama – at the Riverchase Galleria in Hoover and Brookwood Village in Mountain Brook -- remains unknown.

The company plans to announce which of its 770 stores will be closed at a later, undetermined date, once the company completes a careful analysis now under way, the company said in a press release.

“As we make decisions, we’ll announce it, but we don’t have any specific timetable,” Macy’s spokesman Jim Sluzewski said today.

Macy’s Chairman and CEO Terry Lundgren said the store closings are part of an annual analysis.

“Each year, we prune some stores that are our weakest performers so that we can concentrate our resources on the best locations and maintain a strong physical presence,” Lundgren said in the news release. “At the same time, we open a small number of new stores to fill gaps in our market coverage or where we have outstanding real estate opportunities.”

Though Macy’s has a large and fast-growing digital presence, physical stores remain vital to the company’s strategy, Lundgren said. The digital offerings, which include apps and mobile-enhanced websites, integrate with the physical stores to help customers shop wherever and whenever they want, he said.

“Macy’s stores today are places to shop, relax and be entertained – much like they have for generations,” Lundgren said. “Moreover, all Macy’s stores today can fulfill merchandise orders direct to consumers’ homes, serve as convenient locations for customer pick up of merchandise bought online, and are the origination point for same-day delivery in 17 local markets.”

However, as new shopping centers open, many customers changes shopping habits, and often the sales volume of a store gets divided among the new and nearby existing centers, he said.

“While making the decision to close stores is difficult, we know it is necessary for us to remain competitive as customer shopping patterns continue to change,” Lundgren said.

The 35 to 40 Macy’s stores that will close represent about 1 percent of the total Macy’s Inc. sales, the company said. The total annual sales volume expected to be lost is roughly $300 million, taking into account that some sales will be retained in nearby stores and online, the company said.

Over the past five years (2010 through 2015 to date), 52 Macy’s stores have closed, and 12 new Macy’s stores have been opened. In addition, six new Macy’s Backstage off-price locations are opening in fall 2015.

The company plans to communicate its store closing decisions directly with associates in those locations prior to a public announcement. “Macy’s is committed to treating associates affected by store closings with respect and openness,” the company said.

Associates displaced by store closings may be offered positions in nearby stores where possible. Eligible full-time and part-time associates who are laid off due to the store closings will be offered severance benefits.

The Macy’s stores at the Riverchase Galleria and Brookwood Village together employed 300 people as of Jan. 31, according to the company’s website.