Macy's building in Manhattan. Photo by Shutterstock
On Wednesday of this week Macy's announced it will close 125 stores over the next three years. On Thursday it is set to open what the retailer hopes will be the antidote to future closings. It is a new store concept called Market by Macy's in Southlake, Texas.
Market by Macy's will be about 15,000 square feet, or one-tenth the size of a typical Macy's. It will feature clothing, home decor, an apothecary and an in-store cafe. These stores will be located off-mall in lifestyle centers. Macy's Chief Executive Jeff Gennette told analysts that he plans to have four or five of the new stores open by the end of this year.
Macy's also plans to ramp up its e-commerce initiatives as well.
Neither of these options—small store concept, e-commerce initiative—are new to the industry. They have been used by retailers to some success to counter the shifting dynamics in the space. So it is not particularly telling that even a stalwart department store like Macy's is turning to them.
What is notable, however, is Macy's efforts to monetize its real estate. On the same day that the retailer announced its store closures, the Wall Street Journal reported that Macy's was planning to build 1.5 million square feet in office space above its flagship store in Manhattan. Previously, it has been reported that this tower would be 1.2 million square feet of space.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
