Macy’s closes 150 stores, but expands Bloomingdale’s and Bluemercury

Macy’s said Tuesday it would massively overhaul its strategy and retail footprint, closing about 150 Macy’s stores over the next three years while expanding its luxury chains Bloomingdale’s and Bluemercury.

These moves put the stamp of the company’s new CEO, Tony Spring, on an effort to keep the largest department store operator in the United States profitable and stave off an impending takeover bid.

It’s the second major reduction for the Macy’s chain since 2020 and will leave the company with 350 stores, just over half its pre-pandemic number.

The review is intended to “accelerate our path to market share gains, sustainable, profitable growth and value creation for our shareholders,” Mr. Spring, who took over this month, said in a statement.

Macy’s said it planned to close “underproductive locations,” noting that they accounted for 25 percent of the company’s total square footage but only 10 percent of sales. The company said it expected to raise $600 million to $750 million by selling these stores and streamlining some of its warehouses.

The company said it would begin notifying employees at stores it planned to close on Tuesday. It plans to close about 50 stores this fiscal year and the rest of the 150 by the end of 2026.

As the Macy’s stores close, the company plans to add 15 Bloomingdale’s locations. Bluemercury, the beauty chain, will add 30 stores, while others will be renovated. As of November, there were 58 Bloomingdale’s and 158 Bluemercury locations.

The decision to shrink the mid-market Macy’s chain while increasing the presence of the luxury chains is a sign that Mr. Spring wants to reposition the company’s overall image so that consumers see it as a higher-end destination.

Customer research showed people wanted a better shopping experience at Macy’s, the company said, either with improved visual merchandising or more assistance from store associates. The savings the company expects from this strategy, including the sale of some of its assets, could support such improvements.

Mr. Spring, who spent four decades at Bloomingdale’s, took control of the company during a challenging time. In December, an investor group submitted a bid that would take Macy’s private at a valuation of $5.8 billion. The investors, Arkhouse Management and Brigade Capital Management, said that unless the retailer started sharing non-public information with them, they could submit their offer to shareholders.

Sales have fallen as Macy’s struggles to win over the next generation of shoppers and compete in an increasingly e-commerce world.

Mr. Spring had already begun to make his mark. In January, a memo to employees from him and outgoing CEO Jeff Gennette said the company would cut about 2,300 jobs, or 13 percent of the company’s workforce, as it sought to better align its resources with customer behavior and make decisions faster. The company also said it planned to close a handful of stores.

The last major restructuring at Macy’s took place in February 2020, when the company said it would close 125 stores and cut 2,000 jobs. Then the pandemic left many stores dark for weeks, forcing the retailer to scramble to improve its website and e-commerce offerings and figure out how to get people back into stores once they reopen.

After an initial sales boost due to consumer spending on a variety of items at the start of the pandemic, Macy’s has suffered a sales decline.

On Tuesday, the company also reported fourth-quarter earnings, which include the holiday shopping season. Net sales of $8.1 billion were in line with analyst estimates. Sales at both Macy’s and Bloomingdale’s fell from a year earlier, while those at Bluemercury rose 2.3 percent — a sign that shoppers are focusing more on the beauty and skin care categories.