MACY’S has shut down rumors it is under pressure to hive off its iconic Manhattan location, reassuring customers that the company is “committed” to keeping the flagship store open.
According to an exclusive statement obtained by The U.S. Sun, the iconic retailer signaled it had no plans to shut down the Herald Square operation.
Macy’s CEO Tony Spring revealed disappointing sales results in December[/caption]
Macy’s has reassured customers it has no plans to sell its iconic Herald Square location[/caption]
“We remain committed to our Herald Square location and look forward to continuing to serve our customers there,” a Macy’s Inc spokesperson said.
The comment come following reports in the Financial Times which said an activist hedge fund had called on Macy’s to sell real estate properties including its Manhattan location.
The Financial Times reported calls from Barington Capital Group and real estate investment partner Thor Equities for the company to create a separate subsidiary to collect rent from Macy’s retail operations and sell or redevelop some properties.
The fund also reportedly asked Macy’s to cut back spending and explore the sale of its Bloomingdale’s and Bluemercury store banners.
“We invested in Macy’s because we believe the shares are mispriced relative to the upside potential we see in management’s new strategic plan and the compelling value of the company’s owned real estate assets,” James Mitarotonda, Barington’s chair, told the outlet.
“However, we are concerned with Macy’s large capital expenditure programmes.”
The investors estimate that Macy’s portfolio, which includes 521 stores across the country, is worth between $5 billion and $9 billion.
But an internal source at Macy’s told The U.S. Sun there were “no plans” to sell off the iconic Manhattan location and hosed down suggestions there was push from investors to cut back in real estate assets.
The move to reassure customers comes as the retailer faces a tough financial outlook.
Earlier this month, the department store chain revealed disappointing sales figures and was forced to slash its profit outlook.
Macy’s CEO Tony Spring in December said it plans to close about 150 locations by the end of 2026, blaming competition from big box retailers, the rise of e-commerce and high overhead costs.
According to its quarterly results, Macy’s trimmed down its adjusted earnings per share of $2.25 to $2.50 down from August guidance of $2.34 to $2.69.
RETAIL APOCALYPSE
A number of major retailers are suffering as the sector grapples with changing consumer behavior, the rise of e-commerce, and inflationary pressures sparked by the pandemic.
With a raft of chains, including Walmart, winding back their retail footprint, experts say retailers are in financial strife due to increased borrowing costs and consumers tightening their wallets amid ongoing cost of living pressures.
According to analysis by retail data provider CoreSight, there has been a 24% increase in store closures in 2024 alone.
BELOVED STORE
The closure of Macy’s flagship Herald Square location would likely cause outrage among shoppers.
Built in 1902, the location is one of the world’s largest single shops since it expanded to 7th Avenue in 1924.
It has hosted many events, including the first Macy’s Thanksgiving Day Parade in 1929 and 4th of July fireworks in 1976.
The U.S. Sun reports on all things retail, including Macy’s recent quarterly report.
The U.S. Sun has also extensively covered the ongoing closure of brick and mortar locations.
US braces for ‘45,000 store closures’
Some 45,000 bricks-and-mortar stores could close in the next five years, experts have warned.
Several major retailers have announced store closures or gone out of business altogether in recent years.
Chains such as Foot Locker, Sally Beauty, Tuesday Morning, Shore City, Z Gallerie, and Mitchell Gold + Bob Williams have all gone out of business.
Bed Bath & Beyond has closed all of its brick-and-mortar stores and is now an online-only retailer.
The most affected retailers have been clothing, consumer electronics, sporting goods, hobby, book, music, and home furnishing stores since the start of 2019.
UBS has predicted the total number of retail stores will drop by 45k from 958k to 913k.
Despite that, the report says that certain stores should thrive while others decline.
It said retailers such as Walmart, Costco, Home Depot, and Target, could be among the winners.
