Macy’s is rolling out smaller stores in the department store account

A photo illustration of Market by Macy’s located at 321 State Street in Southlake, Texas (Google Maps, iStock)

Macy’s is using less square footage to undertake a big shift in its retail strategy.

The department store chain plans to accelerate the rollout of a slew of smaller stores, The Wall Street Journal reported. Outlets carry fewer products than traditional brand stores and can quickly update inventory to mix trending items with staples.

Macy’s plans to add 10 more non-mall stores this year, which will include Market by Macy’s, Macy’s Backstage, Bloomie’s and Bloomingdale’s outlets. Some will open in markets where more traditional Macy’s stores are closing, as the company is about halfway to its goal of closing about 125 department stores by early 2023.

The chain’s plans are similar to games from retailers like Nordstrom who have unveiled scaled-down outposts offering pick-up and modification services. The seven locations in New York and Los Angeles cover an area of ​​1,200 to 3,000 square feet, approximately 15% of the size of the brand’s department stores.

Macy’s has unveiled plans to open smaller non-mall stores in 2020 after the company’s flagship products were hit hard by the onset of the pandemic. The company unveiled the idea shortly after posting a dismal quarter, reporting a net loss of $431 million.

In the months that followed, Macy’s opened five Market by Macy’s stores between Texas and Atlanta. Stores range from 22,000 to 58,000 square feet, about one-fifth of the company’s typical large stores.

Market by Macy’s stores allow customers to pick up or return items purchased online or at another location. Chuck DiGiovanna, head of real estate at Macy’s, told the Journal that store sales exceeded expectations in the fourth quarter and brought in new customers at a faster pace than other Macy’s stores in the same markets.

Macy’s has also experimented with “dark stores” or distribution centers closed to in-person purchases. These stores in Colorado and Delaware, for example, can be used to fulfill online and curbside orders.

Last year, Macy’s partnered with Toys ‘R’ Us to relaunch the toy retailer in 400 department stores from 2022. The partnership aimed to attract more customers to the store, especially for holiday shopping one-stop shop.

[WSJ] —Holden Walter-Warner