LIMA — The future of the Macy’s store at the Lima Mall likely will not be known until after the holidays.
Macy’s announced Thursday morning it will be closing 100 stores, or about 15 percent of its retail locations, by early 2017. However, it has not finalized decisions on the specific stores that will be shut down.
“We are currently in the process of analyzing the situation of each store so we can make these important decisions as intelligently as possible,” said Andrea Schwartz, Macy’s vice president of media relations, in an email to The Lima News. Schwartz added that for most of the 100 locations, an announcement will be made by the end of January. Others will close as leases or other agreements expire or are amended.
Macy’s, which was the former Lazarus store, has been an anchor at the Lima Mall since the early days of the shopping center.
The Lima Mall opened in 1965 and six years later an expansion saw the 200,000 square foot Lazarus department store added to its west side. In 2003, the Lazarus store became Lazarus-Macy’s. Two years later it dropped the Lazarus name and just became Macy’s.
A closure of Macy’s would be a devastating blow to the mall, which already lost one of its four anchor stores when Elder-Beerman closed earlier this year. The other two anchor stores at the Lima Mall are J.C. Penney and Sears.
Christina Rodriguez, an account executive for Goodman Public Relations, which represents the Lima Mall, said any talk of the Lima Macy’s store closing is pure speculation. She said she had no information on whether the Macy’s in Lima is one of the 100 stores that will close.
Macy’s will have 666 stores following the closings, including 38 Bloomingdale’s locations. That’s down about 23 percent from a peak in January 2007 of 868 stores including Bloomingdale’s. Annual net sales at the stores Macy’s plans to shutter were estimated at about $1 billion.
Macy’s had been a stellar performer in retail circles since the Great Recession, but in the past year and a half, the company has seen slowing sales as it battles competition on all fronts and changing shopping patterns. People are spending more of their money on home improvement as well as experiences like travel or spas. And when they do buy clothing, they’re going to T.J. Maxx or fast-fashion chains like H&M. They’re also increasingly researching and buying online, and gravitating toward Amazon.com, which is bolstering its store private label fashion brands.
Amazon.com is by some forecasts expected to surpass Macy’s as the largest online seller of clothing next year.
Macy’s new strategy will be to concentrate its financial firepower and talent on the best-performing locations. The department store plans to invest in strong stores by adding new vendor shops, increasing the size and quality of staff and investing in new technology.
“We operate in a fast-changing world, and our company is moving forward decisively to build further on Macy’s heritage,” Macy’s CEO Terry Lundgren said in a statement.
Macy’s also reported Thursday that second-quarter profits and sales fell. The results, however, beat Wall Street estimates, and its shares rose more than 14 percent, or $4.95 to $38.95 in early trading.
“The announcements we are making today represent an advancement in our thinking on the role of the stores, the quality of the shopping experience we will deliver, and how and where we reinvest in our business for growth,” said Macy’s President Jeff Gennette, who will succeed Lundgren as CEO in the first quarter of 2017.
Under Lundgren, Macy’s hasn’t been sitting still and has been looking for opportunities to boost sales, from buying upscale beauty brand Bluemercury to launching its own off-price stores called Macy’s Backstage. But since this past May, it announced it has to accelerate its efforts to get shoppers excited. It planned to look for new ways to cut expenses and use that money for more sales help at the stores and online. And it’s expanding its offerings on exclusive launches including one backed by Sir Elton John and Lady Gaga.
Macy’s said it earned $11 million, or 3 cents per share, in the quarter ended July 30. That compares with $217 million, or 64 cents per share, in the year-ago period. Excluding charges that are related to store closings, the company earned 51 cents, which is above the 48 cent estimate from FactSet.
While Macy’s earnings beat Wall Street expectations, it still has a long way to go to see business perk up. Revenue fell 3.9 percent to $5.87 billion. That topped the $5.77 billion estimate from FactSet. Revenue at stores open at least a year, including licensed businesses like beauty, were down 2 percent in the second quarter. Excluding licensed departments, sales were down 2.6 percent. That’s the sixth straight decline for that measure.
The company said it was sticking to its outlook. Macy’s had said in May that it expects revenue at stores, including business from licensed departments, open at least a year to be down 3 percent to 4 percent. Macy’s also said it still expects earnings to be in the range of $3.15 to $3.40 for the year.
The Associated Press, CNNMoney and Money magazine contributed to this report.