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Macy’s to Close Six Stores and Open Nine New Ones

Retailing giant Macy’s announced plans for closing six older, underperforming stores this spring, including major downtown outlets in Pasadena, Houston, St. Paul and Honolulu. The additional closures are planned for the Bloomingdale’s store in the Fashion Show Mall of Las Vegas, and in Belmont, MA. Bloomingdale’s is owned by Macy’s.

At the same time, Macy’s plans to open nine new stores of 105,000 to 180,000 square feet in the next two years, including outlets at malls and other locations in Victorville, CA, Gurnee Mills, Gurnee, IL, The Bronx, Sarasota, FL., and Bay Shore, NY.

Among the reasons for Macy’s underperformance at the stores targeted for closing, according to retail analysts, was deep discounting offered by retailers competing with Macy’s which attracted bargain-hunting consumers and an increase in online shopping, which siphoned sales away from brick and mortar outlets.

Overall retail sales for December were also disappointing, although some stores with low-pricing strategies did better than higher ticket retailers.

“We remain committed to operating a successful and growing stores business as part of our company’s Omnichannel strategy for serving customers wherever, whenever, and however they prefer to shop,” said Macy’s CFO Karen M. Hoguet.

“This leads us to open new stores where we see the opportunity to fill gaps in important markets, as well as to make the tough decision to selectively close underperforming stores that no longer meet our performance requirements or where leases are not being renewed,” she said.

When the old stores close and the new stores are up and running, Macy’s will run 798 outlets and 50 Bloomingdale’s retail locations, encompassing 45 states, the District of Columbia, Puerto Rico and Guam. Bloomingdale’s also operate a retail outlet in Dubai.

Macy’s posted $26.4 billion in sales for fiscal 2011, beating Wall Street estimates. Stores open at least one year enjoyed a 4.1 percent increase in revenues in December. Total Macy’s revenue for the five weeks ending on December 29, increased by nearly 4 percent,

$5.1 billion.

Keywords: Macy’s, Bloomingdales, store closings, underperforming stores, new stores, Malls, Las Vegas, brick and mortar, low pricing strategies, discounting, December sales.