Activist Investors Trying to Rain on Macy's Parade

Macy's said it plans to close roughly 150 underperforming stores over the next three years - the struggling retailer's latest effort to energize its business as it seeks to fend off a proposed takeover by activist investors. Meanwhile, they aim to focus on expanding their luxury brands, Bloomingdale's and Bluemercury, with the restructuring plan leaving them with 350 outlets. Although they haven't disclosed which specific locations will be closed, they noted that these stores represent a quarter of their square footage and about 10% of their sales.

Macy's CEO, Tony Spring, expressed that the store closures, as well as its renewed focus on customer service and updated product lines, will help stabilize the company's sales. The decision to close stores comes as Macy's faces declining sales and increasing competition from online retailers. In Q4, their net sales slipped 1.7% to $8.1 billion and same-store sales declined 6%.

Macy's is also planning to expand its small-format stores, which they believe will provide more convenience to customers. Of course, this will also affect employees, as job cuts have been announced as well.

By closing 150 stores over the next three years, Macy's expects to book asset sale gains of up to $350 million. Following the announcement, Macy's shares rose 5.7% in morning trading.

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