Brick and mortar locations are gasping for breath as online shopping continues to dominate. Many chain stores will start to disappear this year and many mainstream retailers are saying goodbye to their physical locations and opting to focus on the internet instead.
Last year over 9,000 stores had shut down according to Coresight Research. This is almost double compared to the 5,800 stores that closed in 2018. It’s only February of 2020 and so far almost 1,200 retail locations have closed their doors says Coresight.
Macy’s, which was the iconic department store in “Miracle on 34th Street,” recently announced that it would be closing 125 stores and cutting 2,000 of its corporate jobs. While other companies re-focus from brick and mortar to online, Macy’s still wants a physical presence in the consumer world.
The company said that it would close 125 department stores over the next three years as it closes its Cincinnati headquarters and tech offices in San Francisco.
The retailer has a new idea and that’s to turn its focus to opening smaller-format stores in strip centers as it exits weaker shopping malls. The company has already closed over 100 stores since 2015.
“We are taking the organization through significant structural change to lower costs, bring teams closer together and reduce duplicative work,” said CEO Jeff Gennette. He added, “The changes we are making are deep and impact every area of the business, but they are necessary. I know we will come out of this transition stronger, more agile and better fit to compete in today’s retail environment.”
The liquidation or going-out-of-business sales have already begun at approximately 30 underperforming Macy’s stores located in “low-tier malls,” Gennette has said.
Macy’s has also revealed that it is on track for its private brands to make up 25% of sales by 2025. According to the company, it will grow four of its “best” in-house brands — International Concepts, Alfani, Style & Co., and Charter Club — to be worth $1 billion each.
“We’re already well on our way,” Patti Ongman, Macy’s chief merchandising officer said this week. “Private brands are already among our highest margins, but we continue to find ways to improve. We’re building new sourcing and supply chain capabilities.”