Macy's to close 150 more stores in 3 years

A bold new chapter

March 01, 2024

Greetings from the Retailist editorial team! As we head into the weekend, the dynamics within e-commerce, retail, and Direct-to-Consumer (DTC) industries persist in evolving swiftly. Over the recent week, we've observed an array of updates, burgeoning trends, and fresh narratives across the retail sector. Join us as we explore the top stories.


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In the news: Top headlines this week

Macyā€™s to close 150 more stores in 3 years. Macy's CEO Tony Spring announced a strategy shift, emphasizing the closure of underperforming stores that are cash-flow positive to enhance overall performance, amidst a backdrop where Macy's experienced a significant market share loss in key categories despite a "well-balanced quarter" with strong margins and cost control. The company's future direction, titled "A Bold New Chapter," aims to focus on a core fleet of 350 stores and expand smaller formats and luxury segments through Bloomingdale's and Bluemercury, moving away from expanding Macy's Backstage off-price operation, despite the shadow cast by a nearly 8% sales decline when adjusting for an extra sales week. [Retail Dive]

Bath & Body Works projects downbeat FY sales, profit on slowing demand. Bath & Body Works projected annual sales and profit that fell short of analysts' expectations, attributing the downturn to consumers cutting back on non-essential purchases such as candles and fragrances. This cautionary spending behavior, influenced by high borrowing and rental costs in the U.S., has not only affected Bath & Body Works but also other specialty retailers like Estee Lauder and Macy's, all of whom have adjusted their financial outlooks below Wall Street predictions amid rising consumer prices and a significant dip in retail sales. Bath & Body Works anticipates its annual net sales to possibly decline by up to 3% or remain flat, against expectations of a 1.3% increase, with adjusted earnings per share forecasted to be lower than analyst estimates. [Reuters]

Amazon expands smart carts pilot. Amazon's smart shopping carts, aimed at expediting the checkout process, are now in use at a Whole Foods store in California, following two years of testing and an initial launch in September 2020. In addition to these carts, Amazon is enhancing the shopping experience with biometric technology, having introduced a palm recognition payment system across Whole Foods stores in the U.S. Furthermore, Amazon's Just Walk Out technology, implemented in two Whole Foods locations, has shown promising results in improving store performance compared to other locations, despite facing challenges in Amazon's own stores and its adoption by other retailers.[Payments Dive]

HomeGoods has become 'a bit of a cult,' TJX CEO says. HomeGoods, a member of the TJX off-price retail family along with T.J. Maxx, Marshalls, and Sierra, is renowned for enticing customers with a mix of everyday essentials and unique finds at appealing prices. This formula ensures that many visitors leave the store with items they didn't initially plan to buy. The brand's allure is amplified by customers who share their discoveries and shopping tips on TikTok, reaching millions of viewers and further boosting its popularity. [Business Insider]

Newly listed Birkenstock beats revenue expectations on higher pricing, U.S. demand. Birkenstock surpassed holiday quarter revenue expectations with a 22% increase from the previous year, driven by higher pricing and growing demand in the U.S. As a company newly introduced to public trading, Birkenstock is adjusting to the rhythm of public financial disclosures, reaffirming its sales forecast of 1.74 to 1.76 billion euros for the fiscal year, indicating a 17% to 18% growth. Despite a challenging start on the New York Stock Exchange, where its shares fell over 12% on its debut day, the company's stock has since recovered, showing a more than 5% increase this year up to Wednesday's close. [CNBC]

Consumer confidence falls, breaking 3-month rising streak. Consumer spending, a critical driver of economic growth accounting for nearly 70% of GDP, is beginning to weaken in early 2024 after contributing to stronger-than-expected growth last year. This trend is evidenced by a slight decline in credit and debit card spending per household in January 2024 compared to the same period in 2023, as reported by Bank of America. Despite this slowdown, EY forecasts a solid but more subdued consumer spending growth of 2% for 2024, down from the robust 2.2% in 2023, citing softer employment conditions and cost fatigue as contributing factors. [Retail Dive]

J.Crew Partners With SuperCircle for New Recycling Program. .J.Crew has introduced a fiber-to-fiber (F2F) recycling initiative called Second-Life Swim, in partnership with SuperCircle, to offer customers the option to recycle old swimwear from any brand. Launched in February, this eco-conscious program allows customers to return their swimwear to J.Crew stores or online in exchange for a $5 credit per item, up to a maximum of $20, towards the purchase of new J.Crew swimwear. This initiative, aimed at promoting sustainability, will run until August 2024, incentivizing customers to contribute to a more sustainable fashion cycle. [Retail Wire]

Self-checkout promises ultimate convenience. Is it doing its job? Self-checkout technology, introduced in grocery stores 38 years ago, was designed to offer faster and more convenient checkout experiences for consumers and has since become widespread in retail. However, maximizing its efficiency and convenience requires continuous improvement and attentive staff, according to consultants. To enhance the self-checkout experience, retailers are adopting different strategies; for example, Dollar General focuses on maintaining well-staffed stores for checkout assistance, while Target restricts self-checkout to 10 items or less to expedite the process. [Payments Dive]

Costco's average customer shops there at least twice per month and spends around $100 on each visit. Last fiscal year, Costco attracted thousands of daily shoppers, leading to over $237.7 billion in spending. With 129.5 million membership cardholders, the wholesale club serves a diverse base, including households and small to midsize businesses. Data from Numerator reveals that nearly half of US consumers visited Costco at least once in the past year, with 87% of those shoppers returning two or more times, indicating a broad and loyal customer base. [Business Insider]

Walmart trims store-to-home delivery costs by 20%. Walmart's CFO attributes improvements in the company's last-mile delivery efficiency to denser delivery routes, which have become more cost-effective as the online shopper base and order volumes have increased. This optimization has led to a significant 50% jump in store-fulfilled delivery sales in Q4, pushing the category to a $2 billion monthly run rate. The strategy not only enhances delivery efficiency through innovations like adding parcel stations to stores but also plays a crucial role in attracting Walmart+ members and gaining market share among upper-income households by leveraging Walmart's extensive physical store network for online order fulfillment. [Retail Dive]

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