The Wall Street Journal is saying that Macy’s will close 10 of its underperforming stores. (NOTE: Macy’s has since announced that it is closing 11 stores.) Sure, it’s not very many compared to the 860 they operate in total, but that’s still the square footage of about two regional malls, right?
Macy’s is expected to make the announcement today, so maybe it will name the store locations and when they will close.
Of course, this could also just be a routine paring back by the department-store chain, but during a recession like this, it’s hard not to wonder.
Do you expect any large-format closure announcements on the horizon?
Counter Culture 
Smart play by Macy’s, looks to be just the start of the pruning. With the retail forecast for 09-10 as bleak as it is, it makes sense to table-set now. More retail outfits are sure to be “right-sizing” soon.
It’s the old military tactic of a “pre-emptive” strike — hit and remove your “enemy” (underperforming stores – their operational overhead, staffing, etc.) before they have a chance to hit your P&L.
Trite, but I’ll use Sun-Tzu anyway — “every battle is won BEFORE it’s ever fought…”. Everybody (Macy’s included) is thinking ahead — if they don’t action now, they sure will later, and at a distinct $$/competitive disdadvantage as conditions continue to erode.
I’m sure we will be hearing more and more of these announcements as people continue to reign in their spending habits and buy only what is absolutely mandatory, at the lowest price they can find. I would expect more of the high-end retail stores to start pulling back their operations, and closing underperforming stores. Luxury items are out – reality has set in. If you don’t need it to survive – don’t buy it. And if you DO need it to survive, you better be getting the absolute, rock-bottom, best price for it.
Every newspaper in the country is reporting that Macy’s is closing ELEVEN stores. Is this counter-reporting???!
Thanx dummer-
I actually wrote this based on the Journal report that came out before Macy’s official announcement.
I’ll update it now, you watchdog!
We are seeing and going to experience the “Reset” button pushed in the retail/shopping center business. There is good news and bad news. “What’s the good news”? The good news is the “Table” as I see it has to be reset. Too much of the same goods, being offered to a cash strapped society, with the same format competing for this ever decreasing nutrient stream of capital. Just look at your own spendng pattern this Christmas season. Christmas sales(and the general economy this past quarter) had as it’s main concern, Security. Is my job secure? Is it going to be better next year? Should I wait? My credit card balance is almost maxed out…better wait.
Next big fallout in the Big Box category? Let’s see, we have seen everything about the home plummenting. Sales of homes, furniture, household improvement, home electronics, home decor etc.
Apparel weakened…again too much of the same offered across the board. Too many stores. Store closure is actually good solution and we will continue to see more big box and mid size boxes close well into 2009.
Next sectors? Sporting goods, books stores, theaters and restaurants.
What will get us out this malaise?????????? Innovation! Innovating new ideas for the overbuilt space that is on the market and that is coming into the market. Brokers who don’t cannot make the transition to this new order of thinking will disappear. Retailers are already disappearing and shopping centers that once were full, are experiencing the “reset”. Some need to be disappear.
The good news….Reset is the only way to get to innovation. It’s the only way to get back to the next cycle and that is Vision and Imagination. There is no money and jobs are disappearing. That leaves ideas and time. Both items I now have.
Reset will not allow you to “save” the old information. It needs to all go away before we can get into the next cycle. You can’t have Spring till all the leaves of the Winter trees are gone.
Love to know the locations if and when available.
Sean-
From the Macy’s press release:
Stores to be closed are located in:
— Ernst & Young Plaza (Citicorp Plaza), Los Angeles, CA (135,000 square feet; 136 employees; opened in 1986)
— The Citadel, Colorado Springs, CO (195,000 square feet; 105 employees; opened in 1984)
— Westminster Mall, Westminster, CO (156,000 square feet; 110 employees; opened in 1986)
— Palm Beach Mall, West Palm Beach, FL (190,000 square feet; 71 employees; opened in 1979)
— Mauna Lani Bay Hotel, Island of Hawaii, HI (3,000 square feet; 3 employees; opened in 1983)
— Lafayette Square, Indianapolis, IN (160,000 square feet; 84 employees; opened in 1974)
— Brookdale Center, Brooklyn Center, MN (195,000 square feet; 72 employees; opened in 1966)
— Crestwood Mall, St. Louis, MO (166,000 square feet; 176 employees; opened in 1969)
— Natrona Heights Plaza, Natrona Heights, PA (73,000 square feet; 124 employees; opened in 1956)
— Century III Furniture and Clearance, West Mifflin, PA (83,000 square feet; 3 employees; opened in 2000)
— Bellevue Center, Nashville, TN (211,000 square feet; 76 employees; opened in 1990).
There are more shoes to drop and soon. Went to Target yesterday. The shelves are empty. Few employees available. Christmas display spaces look like bombed out empty areas. Do they even have enough revenue reserves to buy more stock?
I found the same thing at a Michael’s Arts & Crafts store – empty shelves and very limited stock. I was surprised…I thought in this economy people would be making more of their Christmas gifts, and going back to buying their kids models and paint-by-numbers sets rather than the latest (expensive) electronic game or remote-control toy. Guess I am just too old-fashioned. I would hate to see the Michael’s and Joann’s go away…
Larry,
I love your optimism, but really what can you do with a big box with no windows, marginal mechanicals, and zero code compliance for alternative uses?? Add to that the fact that it is in a shopping center, located on a major highway, and surrounded by now low cost or empty homes. I have seen uses such as the following: Flea Market, Goodwill stores, trade schools, data storage, paint ball, churchs, research labs, storage, gyms, etc. One outfit was turning empty free standing K-Marts into grade schools. However, these uses either diminish or add little to other retail. And when you look at the limited SF of these uses in any community compared with the potential available space, the numbers are overwhelming. In real estate the right use does not work in the wrong location, nor will the wrong use work in the right location.
I am saving up the down payment for a bull dozer.
How about this one. our dryer dies on Sunday so my wife and I went to Sears to buy a new one. We selected a couple of midlevel models by Kenmore (2 models), Whirlpool and GE. After checking their stack the salesman said none would be available until the end of the month. What??? out of four different dryers, none are available for more than two weeks. Something is wierd about that. Needless to say they lost our business. Jay
The living room, one of the most important areas of the house. This is the first thing the family every time I saw them at home. It is also the venue for guests each time you came to visit. Therefore, it is important that the room was nice and try as much as possible. To do this, must have moving parts stay.
The living room, a meeting place where they were entertained family and guests must be equipped to meet all of your chair. A large selection of sofas. Furniture has a living room, change, movement, it is very comfortable to sit. The site also has some individual people off their feet and treat all people comfortably.
Except for his taking office, a lounge with a table top as well. Centre is a large table for positioning of flowers, food and beverages. The tables are perfect for holding a table lamp and telephone. coffee table is beautiful furniture items, if possible, magazines, books and a coffee table for implementation.
With tables and chairs in place, you need entertainment. TV, stereo consoles, and all could give a little entertainment and fun, not only for the family but also for customers. You can accept all the Electronic Entertainment Centre to provide a more structured basis. Often, the furniture and shelves in some cases, are ideal for all language needs of family fun.