- Macy’s will close 66 stores nationwide in Q125, part of its strategy to cut 150 locations by 2026 and focus on high-performing outlets and e-commerce.
- Kohl’s will shutter 27 underperforming stores by April, including a fulfillment center in California.
- Both retailers are responding to declining sales, pressures from activist investors, and shifting consumer shopping habits.
Both Macy’s (M) and Kohl’s (KSS) are downsizing to adapt to challenges in the retail landscape. According to Bisnow, Macy’s announced plans to close 66 stores in early 2025 as part of a strategy to focus on profitability. By 2026, the company aims to operate 350 stores, down from 500 in 2021. Meanwhile, Kohl’s will close 27 stores by April, including its San Bernardino e-commerce fulfillment center.
Macy’s CEO Tony Spring emphasized reallocating resources to better-performing stores and digital platforms, while Kohl’s CEO Tom Kingsbury framed the closures as a necessary step for long-term growth.
Real Estate Strategy
Macy’s continues to monetize its real estate, projecting $275M in revenue from property sales in 2024. Notably, its Downtown Brooklyn store sold for $23M, significantly below market value. Macy’s has been under pressure from activist investors, including Barington Capital, to maximize its real estate assets.
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Impact on New York City and Beyond
- Macy’s NYC Closures: The retailer is closing five stores across the boroughs, leaving nine locations, including its Manhattan flagship. Closures include Fulton Street and Sheepshead Bay in Brooklyn and Fordham Road in the Bronx. Staten Island will retain one location, while Queens will lose its Backstage store.
- Kohl’s Impact: California is hardest hit, with 10 closures, including a major e-commerce center. No NYC locations are affected.
Industry Challenges and Investor Pressures
The closures underscore broader struggles for department stores. Both Macy’s and Kohl’s face declining sales, changing consumer behaviors, and activist investors advocating for strategic overhauls. Vision One Management Partners pushed Kohl’s to sell last year, while Macy’s has been urged to leverage its real estate better.
Looking Ahead
As traditional retailers recalibrate their strategies, closures like these may become more common. Macy’s and Kohl’s efforts reflect the challenges and opportunities of adapting to an increasingly digital and competitive retail environment.
