News that Macy’s Inc. (NYSE: M) would be shuttering some stores as part of its broader plan to “right-size” the company sent shares higher on Wednesday. COVID-19 lockdowns have hit many retailers hard, and Macy’s is no exception. Now the company is looking to right the ship.
Prior to the lockdowns, Macy’s said that it would be closing a number of stores across the country. Specifically, the company planned to close 125 of its least productive stores in an effort to deal with decreasing mall traffic. So far, the company has shuttered roughly 30 stores.
Looking ahead, the company plans to close about 45 stores this year, which again is part of its three-year plan to reduce its least productive stores and focus on its more productive outlets.
Currently, Macy’s operates about 775 stores under various banners, and these are on the cutting board as well.
The company’s statement said:
Macy’s is committed to rightsizing our store fleet by concentrating our existing retail locations in desirable and well-trafficked A and B malls. To that end, we announced several store closures today that align to the guidance we provided in February 2020. These closures bring us closer to achieving the right mix of mall-based stores.
Excluding Wednesday’s move, Macy’s stock had vastly underperformed the broad markets, with shares down about 33% in the past 52 weeks. However, in the past six months alone, the stock was up closer to 74%.
Macy’s stock traded about 7% higher on Wednesday to $12.18, in a 52-week range of $4.38 to $18.57. The consensus price target is $8.19.