Macy's to shut down 65 stores before year-end

In the United States, Macy's is intensifying its store closure strategy due to continual revenue drops, with a recent announcement indicating plans to shut down around 65 locations by the end of the fiscal year. This adjustment raises the anticipated closures from earlier estimates of 55 and 50 announced earlier in the year. According to Adrian Mitchell, Macy's Chief Financial Officer, the closures will take place post-holiday, as the company aims to revitalize its operations under the initiative known as 'A Bold New Chapter,' which seeks to streamline unproductive stores by 2026. Since the second quarter of 2022, Macy's has recorded consecutive year-over-year revenue declines, culminating in a total revenue of $4.9 billion for the third quarter of 2024, down from $5.03 billion the previous year. Furthermore, net income saw a significant decrease, falling from $41 million to $28 million over the same timeframe. The initiative was first introduced in February, anticipating that the critical changes would facilitate sustainable growth and enhance shareholder value. However, Hudson's observation highlights a challenging consumer spending environment, particularly for lower- and middle-income earners. Inflation and increased interest rates have placed considerable pressure on these demographics, resulting in a detrimental impact on consumer behavior, specifically among the lower-income clientele who are sacrificing discretionary spending to manage essential living costs. As the retail environment continues to evolve under such pressures, executives within the company have expressed skepticism about seeing substantial improvements in consumer spending trends in the near future.