Macy's to delay store closures, launch third-party marketplace next year
Macy's is pausing its plan to close 125 stores, announced last year as part of its Polaris turnaround, telling analysts Thursday that physical locations have proven key to digital as well as brick-and-mortar sales.
Following a tactic employed by Amazon, Nordstrom, Walmart and Target to varying degrees, Macy's on Thursday also said it will launch a third-party marketplace for Macy's and Bloomingdale's customers in the second half of next year.
The announcements came as the department store reported third-quarter net sales rose 36.3% year over year and 5.2% from 2019 to $5.4 billion. Store comps, including leased-based sales, rose 35.6% and 8.7% against 2019. Net income reached $239 million from last year's $91 million loss, up from $2 million in net income two years ago.
Macy's is adding yet another sales format to its ecosystem, this time a "curated digital marketplace" that CEO Jeff Gennette said will allow the retailer to further its e-commerce expansion.
"We can grow digital efficiencies faster, we can generate more profitability, we can get more depth and breadth of assortment, and really, you know, address new brands and emerging trends for a customer who looks to us to be able to do that," he said about the marketplace during the company's conference call.
The third-party platform joins the company's still-morphing network of sales approaches. That includes three tiers of full-line stores: flagships like those in New York and San Francisco, "Growth150" stores (remodeled locations representing half of its revenue) and "neighborhood stores." Off-price Backstage, mostly found as spaces within Macy's locations, is also opening more stand-alone stores, and the company intends to expand its smaller, strip-center-based Market by Macy's and Bloomie's, executives reiterated Thursday.
While its Polaris strategy initially called for significantly downsizing its mall-based fleet, that's now under review as the department store uncovers stores' role in boosting digital sales. But that will only work if the stores are much better merchandised than they are now, according to GlobalData Managing Director Neil Saunders. Macy's owns a lot of its mall locations and likely enjoys favorable leases when they don't because of their importance as anchors