Macy's Is Closing 100 More Stores

Aug 11, 2016

Hopefully you weren't too attached to your local Macy's store. Or your shopping mall.

Retailer Macy's announced on Thursday morning it would close 100 locations, about 14% of its stores, in an effort to "concentrate its financial resources and talent" on better-performing stores. The company has not yet announced which stores will close, but says the closings are to take place in early 2017. Since 2010, 90 Macy’s stores have closed, though 13 new ones opened.

The announcement follows Macy's earnings report release, in which sales and earnings beat analyst expectations, though sales have been on the decline. The Cincinnati-based department store chain has been cutting its losses for at least a year now, in line with what its competitors, too, are dealing with: The decline of the American shopping mall, which was once anchored by retailers like Macy's and JC Penney.

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The Wall Street Journal reports that Thursday's earnings weren't all that surprising, given that Macy's "kicked off the year with its lowest quarterly sales since the recession and warned that the rest of the year wouldn’t be much better."

Last quarter, Macy's even a found way to blame tourists for their sales' declines, citing a strong dollar leading to decrease spending by foreign visitors (Macy's stores are often found in tourism-heavy areas.) More likely, say analysts, is that the department store company is having trouble combatting the dominating online behemoth Amazon and adjusting to changes in consumer spending behavior.

Reuters notes that "shoppers increasingly preferring to spend on big-ticket items such as electronics and cars than on clothes," which is in line with the fact that U.S. automakers had their best sales year ever in 2015, and have maintained a strong sales pace this year.

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JC Penney

In an effort to reduce expenses, Penney has been steadily closing underperforming stores at the beginning of each year: 33 in 2014, 40 in 2015, and seven in early 2016. In May, the Plano, Texas-based retailer, which has currently more than 1,000 locations nationwide, also announced cost-cutting measures like cutting payroll and eliminating overtime hours for employees. Shares of JC Penney have fallen by more than 25% since March.

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Bloomberg—Getty Images

Macy's

This mall anchor—known to many by the titular Thanksgiving Day parade that passes through Herald Square in New York—has been consistently shutting down stores over the past year. In August, Macy's announced that it would shutter 100 stores—following an announcement eight months earlier in which the department store said it would close 36 stores and eliminate 4,500 jobs in an effort to boost profitability. Over the past six years, Macy's has closed more than 90 stores (it currently has more than 675).

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Sears

In April, Sears Holdings—which owns both Sears and Kmart–announced that it would close 68 Kmarts and 10 Sears locations that were not turning a profit. All the stores are expected to be closed by the end of July. Sears, which is suffering from its largest dip in operating performance since 2006, would have to close 300 existing stores, or more than 40% of its locations, in order to achieve the productivity it enjoyed a decade ago, CBS News reported.

Read Next: The Big Reason You Once Went to the Mall Is Rapidly Disappearing

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American Eagle

American Eagle Outfitters, which rose to prominence as the outfitter of suburban teenagers, announced in 2014 that it would close 150 of its approximately 1,000 stores over the subsequent three years. Perhaps the efforts are paying off: Share prices of the clothier have remained relatively steady since the beginning of the year, while the stock of other apparel sellers has floundered. American Eagle also said this year that it would roll out a mobile-friendly version of its website, following in the footsteps of retailers like Walmart that are trying to make the online shopping experience more consumer-friendly.

Roberto Machado Noa—Getty Images

Aéropostale

Like teen-clothing competitor American Eagle, Aéropostale is falling on hard times. In May, it filed for Chapter 11 bankruptcy after losing money for 13 consecutive quarters. At the same time, it also announced the closing of 154 of its approximately 800 locations, some of which were set to shut down that same week, and said it may consider shutting down even more stores in the months to come. Like American Eagle, the two face stiff competition from "fast fashion" chains like H&M, which have pulled ahead by putting new styles into production at a fast pace.

Read Next: Meet the Hot (and Cheap!) Fast-Fashion Giant Now Arriving in the U.S.

Bloomberg— Getty Images

Sports Authority

The nation's largest sports retailer may have been among the hardest hit by the recent retail slump. After filing for bankruptcy in March, Sports Authority said it would close 140 of its 450 locations. But after failing to find a buyer for its remaining stores, it decided to shut them all down. Before you hit Sports Authority's extensive sale, which began in May and promises more than 70% off merchandise, bear in mind that the best deals aren't likely to appear until closer to the stores' close date of August 31, after bargain hunters have already scoured through the prime offerings.

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Bloomberg—Getty Images

Office Depot

In order to fund the buyout of rival Office Max in 2014, Office Depot promised to close at least 400 stores by the end of 2016, The Street reported. In 2014, it shuttered 168 locations, followed by 181 in 2015. It also plans to close down about 50 U.S. locations this year, bringing it just one store shy of its stated goal. Office Depot may be forced to shut down even more stores if Staples' impending buyout of the office supply chain does not receive regulatory approval.

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The Children's Place

The Children's Place, which reported disappointing earnings in March 2015, upped its planned store closes: from 125 through 2016, to 125 in 2017, the Wall Street Journal reported. In the fourth quarter of 2014 alone, it closed 21 locations. Investors have criticized the children's apparel chain for its poor merchandising decisions and negative sales figures within individual locations.

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Walgreens

In April 2015, the largest U.S. pharmacy chain announced that it would close 200 stores as part of an effort to cut costs by $500 million, USA Today reported. But in the future, in order to seal a $17.2 billion merger with Rite Aid, it might be forced to close as many as 1,000 stores. That's a significant portion of Walgreens' more than 8,000 locations in the U.S., but perhaps a worthy sacrifice to join forces with a company with 4,600 stores nationwide.

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Walmart

In an attempt to consolidate, Walmart announced at the beginning of the year that it would shut down 269 locations around the world, including 154 in the U.S., including all 102 of its small-store "Express" locations. Walmart plans to open up more than 500 stores worldwide this year, but these stores will primarily be Supercenters and Neighborhood Markets in locations deemed more lucrative. Additionally, this week, perhaps in an attempt to take on Amazon head-on, Walmart also announced a free two-day shipping service nationwide.

Read Next: Why Walmart’s Small ‘Express’ Store Format Was Such a Big Failure

Bloomberg—Getty Images

Barnes & Noble

Barnes & Noble is on the upswing, kind of. The brick-and-mortar book store (yes, those do still exist) plans to close just eight stores this year, the fewest number of locations shut down since 2000. In fact, it's B&N's physical stores that have been propelling the company's growth in the past year, while online sales have plunged by double digits. Still, the number of Barnes & Noble locations has decreased from 798 stores in 2008 to 640 as of early this year.

Richard Levine—Alamy

Finish Line

"Athleisure" attire may be in vogue, especially with the all-important millennial demographic, but sports clothier Finish Line's profits aren't showing it. Early this year, the Indianapolis-based chain said it planned to close 150 of its 617 stores, because they were generating just $1 million each in annual sales, or about half the company average. Finish Line hopes the closures will help cut costs and allow the chain to focus on more profitable locations.

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