Toppin’ the Christmas list… Macy’s shares jumped 20% yesterday after reports that the OG department store got a $5.8B buyout offer. It’s TBD if it’ll entertain it (Macy’s turned down a buyout bid in 2017). The chain has nearly 500 locations in the US, including 30 Bloomingdale's stores and 150+ Bluemercury outlets. But its earnings haven’t been as dazzling as its holiday displays: sales fell 7% at Macy’s last quarter and dipped at Bloomingdale’s too.
Fit for a strip mall: To lure customers, Macy’s plans to open 30 more of its smaller-format stores like Bloomie’s. Its small-format skincare and cosmetics chain, Bluemercury, has notched 11 straight quarters of growth.
Retail reshuffle… While IRL shopping has made a comeback since Covid, US department stores have struggled as shopping habits continue to shift online. In 2020, JCPenney, Neiman Marcus, and Lord & Taylor all filed for bankruptcy. Meanwhile, more curated smaller-format chains like Abercrombie & Fitch, American Eagle, and Urban Outfitters posted record sales last quarter. To compete, department chains have closed hundreds of underperforming stores and opened smaller shops.
Legacy doesn’t equal longevity… 165-year-old Macy's has been a bellwether of US retail, capturing the attention of millions with its Thanksgiving Day parades and festive storefronts. But department-store market share has been down about 4% each year, on average, since 2018, and is expected to keep dipping. Now Macy’s has to adapt to the changing retail landscape to survive.