On the 27th, American chain retail company Macy's announced a restructuring of its business strategy, with plans to close 150 Macy's stores and open 45 new high-end clothing or beauty sub brand stores over the next three years, while simplifying and modernizing end-to-end operations.
On the same day, Macy's announced that the company will improve the variety of products sold to increase relevance and value, create a modern shopping environment, and continue to focus on online sales. By closing 150 Macy's stores in the next three years, resources will be prioritized for investment in the remaining approximately 350 stores and continuing to expand small stores.
Meanwhile, Macy's plans to leverage its advantageous position in the luxury goods market to continue expanding its luxury goods stores and online sales. We plan to open approximately 15 new clothing sub brand stores and approximately 30 beauty sub brand stores in the next three years, while also renovating approximately 30 beauty sub brand stores.
Macy's also stated that in the next three years, it plans to optimize and monetize its supply chain asset portfolio, optimize distribution, improve inventory planning and allocation, and launch a technology platform that can scale up.
Macy's department store predicts that from 2025 onwards, sales will achieve low single digit year-on-year growth, sales and management fee growth will be lower than historical growth of 2% to 3%, capital expenditure will be lower than in 2024, and free cash flow will return to pre pandemic levels.
Tony Spring, CEO of Macy's, said that this new strategic challenge is a strong call to action, and the company is taking necessary actions to revitalize relationships with customers.
Macy's performance report released on the same day showed that the company achieved a net sales revenue of $23.09 billion in the 2023 fiscal year (as of February 3 this year), a year-on-year decrease of 5.52%. The net profit for the fiscal year 2023 was $105 million, significantly lower than the $1.177 billion in 2022. Last year, there was a loss of $71 million in the fourth quarter.
Macy's expects net sales for the fiscal year 2024 to be between $22.2 billion and $22.9 billion, with adjusted and diluted earnings per share expected to be between $2.45 and $2.85, lower than $3.5 in the fiscal year 2023 and $4.48 in the fiscal year 2022.
Macy's Department Store, headquartered in New York City, has a history of over 160 years. Affected by e-commerce and the pandemic, the company announced a large number of store closures and layoffs of about 2000 people in early 2020. In January of this year, there were rumors of layoffs of over 2000 people.