AN ICONIC department store has revealed key next steps for the company amid a slew of closures.
The New York based retailer has embarked on a turnaround plan that will see the closure of another 86 stores.
The New-York based retailer has embarked on a turnaround plan The plan will see the closure of another 86 storesMacy’s has slashed its profit forecast for the year, citing the impact of tariffs and worries about consumer spending.
But company officials say Macy’s boss, Chairman and CEO Tony Spring, is taking four key steps to turn things around.
These steps are to source fewer goods from China, negotiate with suppliers, get vendor discounts and cancel orders and absorb increases.
This is to combat the impact of President Donald Trump’s new fees on imported goods.
Spring told Wall Street analysts: “Given uncertainty regarding the tariff impact on consumer health and demand, we believe it’s prudent to incorporate a more choiceful consumer into our outlook for the quarter and for the remainder of the year.”
But according to outgoing Chief Financial Officer, Adrian Mitchell, the retailer will have to raise prices in some cases.
He said: “So we’re making selective price increase in selective brands, selective categories, because we believe the value equation for the customer is still very relevant.”
Macy’s, which also owns Bloomingdale’s and BlueMercury, updated its guidance as it reported its first quarter results on Wednesday.
It is now expecting earnings per share of $1.60 to $2, down from $2.05 to $2.25.
In an attempt to revive sales, Macy’s turnaround plan includes downsizing its store fleet and supply chain.
Spring recently issued a blunt four-word warning on store closures as the department store chain embarks on its Bold New Chapter initiative.
As part of the turnaround effort, Macy’s closed 64 of its roughly 150 stores it plans to shut by 2027, with 86 more to go.
They have sold some of that real estate, registering $16 million in asset sales as it continues to monetize store locations and “rightsize” its supply chain network, according to Adrian Mitchell.
According to the company, 125 “reimagined” stores have been improved with new product assortments and more staff.
Macy’s has been forced to sell some of its real estateThose stores have been outperforming the rest of Macy’s fleet.
Macy’s net sales were down 5.1 per cent in the first quarter compared to last year at $4.6 billion.
The retailer projects net sales of $21 billion to $21.4 billion for 2025.
According to retail analyst and managing director of analytics firm GlobalData, Neil Saunders, these figures aren’t “terrible”.
He said: “This is not a terrible set of numbers from Macy’s, especially as the overall sales decline of 5.1 per cent includes the ongoing closure of stores.”
However, Macy’s luxury chains, Bloomingdale’s and BlueMercury saw a rise in sales.
Saunders added: “Despite the more challenging economy ahead, Macy’s outlook is not too bad, with overall comparables penciled in for minus-two per cent at worst.
“Go forward stores could, at best, be flat.
“While this means that Macy’s won’t grow, it also means it will be far from being at the bottom of the retail league table.”
While Macy’s did not comment on Saunders remarks, CEO Tony Spring said Macy’s plans to take “markdowns on early spring product that arrived late in the fourth quarter and in February”.
According to Spring, this will cut into its margins but provide other benefits.
He added: “This will ensure we continue to provide newness throughout the summer and are well positioned for the fall and holiday season.”
Spring recently flagged a major overhaul to the chain’s product offering, meaning shoppers may no longer be able to buy their favorite items.
This came after he revealed the company had decided to cancel or delay orders from China in response to the introduction on tariffs.
What items will be affected by the tariffs?
AMERICANS should prepare to see significant prices changes on everything from avocados to cars under President Donald Trump's new global tariffs.
Here is a list of some of the everyday products that could see a massive price tag surge.
Coffee Tea Bananas Foreign-made cars Sneakers Furniture and other home goods Pharmaceuticals Video games Clothing Toys Washers and dryers Avocados Housing materials Read More Details
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