Macy’s, Kohl's Announce Dozens Of Store Closures
Two of the best-known department stores in the U.S. plan to close almost a hundred stores combined in the coming months.
Kohl’s plans to close 27 stores across the country by the end of April, focusing on the stores that are “underperforming,” according to a Thursday press release.
Also on Thursday, Macy’s announced the locations of 66 department stores it plans to shutter during the first quarter. The closures are part of the company’s long-term strategy to return to profitability by focusing on its best-performing stores and online sales.
The iconic department store chain said last year that it planned to cut its footprint by around 150 stores by 2026, leaving it with a total of 350 locations nationwide.
"We are closing underproductive Macy’s stores to allow us to focus our resources and prioritize investments in our go-forward stores, where customers are already responding positively to better product offerings and elevated service," Macy’s Chairman and CEO Tony Spring said in a statement.
Macy’s owns many of its stores, and it has sold off some of its prime real estate as it has shuttered locations. It projected in December that it would generate around $275M of revenue from real estate sales in 2024, up from previous expectations of $150M.
But both department store companies have struggled in recent years with slumping sales and battles with activist investors over the direction of the companies.
Activist hedge fund Vision One Management Partners pressured Kohl’s last February to sell itself, Business of Fashion reported at the time. Macy’s is coming under fire from Barington Capital and Thor Equities to reconsider and maximize the value of its real estate, Reuters previously reported.
The state bearing the brunt of Kohl’s closures is California, where a total of 10 locations were listed in the release. The closures include its San Bernardino e-commerce fulfillment center, which the department store chain plans to shutter in May when its lease runs out.
"We always take these decisions very seriously," Kohl’s CEO Tom Kingsbury said in a statement. "As we continue to build on our long-term growth strategy, it is important that we also take difficult but necessary actions to support the health and future of our business for our customers and our teams."
Kohl’s didn't announce plans to close any New York City locations. But Macy's is closing more than a third of its stores in the five boroughs and 10 across New York state, leaving nine NYC locations, including its Manhattan flagship.
Macy’s furniture and Backstage store at 88-01 Queens Blvd. will shutter, as will the outpost at 404 E. Fordham Road, one of Macy’s three Bronx locations. Staten Island will be left with just one location after the company closes its outlet at 98 Richmond Hill Road.
The other two NYC closures will be in Brooklyn. The Downtown Brooklyn location at 422 Fulton St. and the Sheepshead Bay location at 2027 Emmons Ave. will close, leaving the department store with just one Brooklyn location, at the Kings Plaza mall in Mill Basin, according to the locations listed on its website.
Macy's sold its store on Fulton Street for $23M, or $50 per SF, well below the going rate for retail space in Brooklyn, the New York Post reported.
