Macy's is closing 150 stores. What could this mean for New Jersey locations?
Macy's recently announced plans to close about 150 store locations as a part of a new business strategy.
According to a news release from the retailer, about 150 "underproductive locations" will close through 2026. By the end of this fiscal year, 50 stores will be closed.
In addition to closing numerous Macy's locations, this "bold new chapter" will allow the company to expand its other business ventures within the luxury market, such as Bloomingdale's and Bluemercury.
"A Bold New Chapter serves as a strong call to action. It challenges the status quo to create a more modern Macy's Inc. We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments, and compelling value," said Tony Spring, chief executive officer of Macy's Inc.
New Jersey Macy's locations
As of March, Macy's Inc. had 481 Macy's locations, with 25 of them in New Jersey.
New Jersey's Macy's locations:
- Bridgewater
- Cherry Hill
- Deptford
- East Brunswick
- Eatontown (2)
- Edison
- Freehold
- Jersey City
- Lawrenceville
- Livingston
- Maple Shade
- Mays Landing
- North Brunswick
- Paramus (3)
- Rockaway
- Short Hills
- Springfield
- Toms River
- Wayne (2)
- West Orange
- Woodbridge
The company has not released a list of affected store locations.
What could this mean for NJ Macy's and malls?
With this news, shoppers are left wondering what the future of Macy's and malls in general may look like going forward, especially in this retail-heavy state.
Marc Kalan, associate professor at the Rutgers Business School, said it is likely that a handful of New Jersey's Macy's will close, but this does not mean the brand will go away completely.
Macy's is in a unique position, Kalan said, as the stores are a bit more upscale than a Walmart or a Kohl's, but they are not quite a Saks or a Bloomingdale's.
"They are structured very effectively right in that middle- to upper-middle-class segment of the market, and they have done a really good job building their nameplate," Kalan said. "However, as I have read about Macy's recently, some of their stores on a square-foot basis are not delivering numbers that make them economically viable. They don't have the foot traffic or the sales, and so what Macy's is focused on doing is eliminating the low-producing stores and reallocating their assets."
Kalan, who has decades of consumer marketing experience, predicts that in malls such as the Mall at Short Hills that are upscale and bring in a lot of foot traffic, Macy's will likely stay, and Macy's asset stores such as Bloomie's and Bluemercury may pop up. On the flip side, malls that are a bit older, bring in less foot traffic and are near more popular malls are more likely to see Macy's close.
This trend is not new, as major retailers like Sears and Lord & Taylor have closed up shop in and around New Jersey in recent years. Macy's, however is not going out of business; it is remodeling its business plan.
"I think these are long-term trends," Kalan said. "It strikes me when I read the article about Macy's closing 150 stores I did not think 'Macy's is in trouble,' rather I thought 'there is a recognition here that the market is changing.' E-commerce has influenced it; demographics, population density, the aging of the population are all influencing this. This does not mean Macy's is going away ... but they did say they will look to move out of the underproducing stores, but they will reallocate into these more specialty type stores, where they see the future going."
Overall, New Jersey is a highly retail-oriented state. On average, it's an upscale state with a high population density in a prime location between two major metropolitan areas which, Kalan said, supports a wide variety of retail offerings. But things are changing.
In a post-pandemic world of convenient e-commerce and aggressively moving companies like Amazon, the expansion of affordable standalone retailers like Walmart or Kohl's, which offer a wide variety of products, and shifts within our economic and geographic environment, people are simply not going to walk around the mall as often as they used to.
Companies like Macy's are looking at a long-term horizon with plans that allow the business to try to strategically recapture some percentage of lost sales and invest in other outlets that look more promising.
"Are people leaving malls? No," Kalan said. "The malls that have an interesting and unique array of retailers will continue to be destination shopping locations. But those that are everyday types of stores without unique stores, I think those run a high risk of losing their traffic and therefore losing their viability."