Macy's to close as many as 40 stores

In the name of optimizing its omnichannel approach, Macy's said it plans to close between 35 and 40 department stores at undisclosed locations in early 2016 while moving ahead with expansion of its off price format.

The stores to be closed represent about 1% of Macy’s total annual sales of roughly $28 billion. Macy’s said it won’t disclose the locations until it completes a careful analysis now under way to make final decisions and notifies store employees. Together, the stores' annual sales volume, net of sales expected to be retained in nearby stores and online, is expected to be roughly $300 million.

"Physical stores remain absolutely vital to our omnichannel strategy, which provides local touchpoints and tailored merchandise assortments for shoppers in nearly every major market," said Terry J. Lundgren, Macy's, Inc. chairman and CEO. "As new shopping centers are opened, however, many customers change their shopping habits and often the sales volume of a store gets divided among the new and nearby, existing centers. Each year, we prune some stores that are our weakest performers so that we can concentrate our resources on the best locations and maintain a strong physical presence. At the same time, we open a small number of new stores to fill gaps in our market coverage or where we have outstanding real estate opportunities."

Since 2010, Macy’s said it has closed 52 Macy stores and open 12 new stores. Lately, the company’s new off price format has been getting a lot of attention with six locations set to open this fall.

"Macy's is already one of the largest and fastest-growing digital platforms in the country. Our fast-growing digital offering, including robust apps and mobile-enhanced websites, integrate with our stores to provide an unparalleled omnichannel shopping experience for customers wherever, whenever and however they prefer to shop. As a result, we are able to attract new customers and grow sales profitably," Lundgren said.