Macy’s accelerates plans to open smaller stores outside malls

In 2020, Macy’s opened its first Market by Macy’s location, in the Dallas-Fort Worth area.

Source: Macy’s

Macy’s is accelerating its plans to open smaller stores not connected to suburban shopping centers in an effort to evolve with its customers’ shopping preferences stemming from the Covid pandemic.

The department store chain said on Wednesday it will open three stores this fall, each representing how Macy’s thinks about how it plans to reposition its real estate in the future. That includes:

  • Combining several of the different companies under one roof
  • Closure of one of its department stores in a traditional shopping center to open a smaller Macy’s store, known as The Market by Macy’s, in a more densely populated part of town nearby
  • Adding another market through Macy’s location in an area where it already has several of those stores

“We want to be convenient and we want to make it easy,” Macy Chief Store Officer Marc Mastronardi said in an interview. “Customer behavior just keeps changing. And the more we as an organization have the flexibility to switch and respond, this feels like the next natural evolution.”

This fits in with a broader strategy Macy’s laid out to investors in February 2020, shortly before Covid-19 cases started to increase in the United States. At the time, the company said it planned to close 125 stores in lower malls within three years and explore formats outside of malls.

Since then, Macy’s has opened five stores under the Market by Macy’s banner, which are about one-fifth the size of its entire locations and tout services such as buy online, pick-up in-store. By the end of this year there will be eight.

Going small and moving away from the mall has become a bit of a trend in retail. It’s a blueprint that retailers from Gap to Nordstrom have followed. Kohl’s also said it aims to open 100 smaller locations over the next four years. Macy’s opened its first pint-sized Bloomingdale’s store last year, called Bloomie’s.

Some U.S. malls have lost their appeal—and tenants—as consumers today tend to shop quickly and easily. Shoppers are also much less interested in spending hours browsing sprawling multi-storey stores, leaving retailers testing slimmed-down versions.

“There are malls that are underperforming and this is an opportunity to enter a market in the right place and in a new format,” says Mastronardi.

This fall, Macy’s will open its first-ever dual Market by Macy’s and Macy’s Backstage store, which rivals off-price chains, including TJ Maxx, in the Chicago metropolitan area.

Second, it plans to close one of its department stores in the Chesterfield area of ​​St. Louis to open a smaller Market by Macy’s location nearby, in an open-air shopping center known as Chesterfield Commons.

And third, Macy’s will open a Market by Macy’s store at Johns Creek Town Center, in Suwanee, Georgia, marking its third such location in the metro Atlanta area.

Mastronardi said the Atlanta market has proven to be a place where people show an affinity for the Macy’s brand, and it’s also a busy area, giving Macy’s a reason to have a stronger presence.

He also said Macy’s customers spend an average of three times more online in markets where the retailer also has brick-and-mortar stores.

“If we can be close to a customer with a physical format, our digital business is significantly better,” he said.

Macy’s counted 511 of its eponymous locations, 55 Bloomingdale’s stores and 160 Bluemercury makeup stores as of April 30.

Leave a Comment