Macy’s has announced its plans to significantly increase the number of small-format stores by the fall of 2025. The company aims to open up to 30 smaller stores, building upon the already existing 15 small-format Macy’s and Bloomie’s locations.
Efficiency and convenience are the key factors driving this expansion strategy. These small-format stores provide customers with an alternative shopping experience within Macy’s omnichannel ecosystem. Adrian Mitchell, the Chief Operating Officer and Chief Financial Officer, stated that these stores present a unique opportunity to target high-traffic shopping centers.
Macy’s first launched its small-format locations in the Dallas-Fort Worth area last year and has since expanded to other regions like Atlanta, Chicago, St. Louis, Boston, and Las Vegas. These stores are strategically placed in off-mall shopping centers, such as strip malls, to attract a large number of customers.
In terms of size, these small-format locations are approximately one-fifth the size of traditional Macy’s stores. However, despite their smaller footprint, they offer a curated selection of merchandise from the department store’s assortment.
Macy’s reported positive sales growth for its small-format locations open for more than one fiscal year, attributing it to their comparable owned-plus-licensed basis.
The company is currently working on revitalizing its business as sales slump. To achieve this, Macy’s has appointed new CEOs for both Macy’s and Bloomingdale’s, rejuvenated its private label brands, and forged partnerships with legacy retailers like Gap (GPS).
Despite these efforts, investors have not shown enthusiasm towards the company’s initiatives. Macy’s stock has experienced a 44% decrease this year, in contrast to the 11% gain of the S&P 500.