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There’s an episode of 30 Rock called “Respawn” that follows Tina Fey’s character as she, in her constant struggle to have it all, realizes there’s only one option left: “I have to blow myself up.”
You can replace Macy’s with Tina Fey in that sentence without the slightest problem. The struggling retailer is just under two months removed from announcing it will shut down 68 stores this year. But that move is already paying dividends.
According to Bloomberg, Macy’s reported fourth quarter earnings that were better than expert estimates, proving that there’s still hope for struggling American stores. Yes, same-store sales are down 2.1 percent, but that’s not as bad as analysts expected. And the report specifically cited closing retail locations as the reason Macy’s beat expectations and slowed its descent into the retail crevasse.
The store shuttering has just begun. The department store giant closed three in the middle of 2016 and 63 already in 2017, with two more to come this year and 30 additional locations in 2018 and beyond. The bad news is that you might be losing your local Macy’s, but the good news is Macy’s will still exist out in the world. It’s like when a relationship transitions into a long-distance one: You can still get access online, but you’ll have to travel to touch, feel it.
Because, of course, Macy’s e-commerce isn’t going anywhere. One reason Macy’s is struggling in the first place is because of online shopping; an annual survey of 5,000 online consumers found that, at least for them, 51 percent of shopping is now done online, according to the Wall Street Journal.
Yet the Macy’s strategy is an important development when many mall brands are closing stores en masse. Closing stores can often feel like just the first tremors of a much more dramatic announcement, as the first part of a story that ends as American Apparel’s story did.
Like American Apparel, Macy’s is also still in danger of getting sold off, in this case to Hudson’s Bay Co. But the department store’s early success after blowing itself up, so to speak, is a positive sign that retailers can dig themselves out of a hole even after they’ve tumbled into one. Companies like Payless and BCBG should take note. The strategy has been successful for at least one retailer. Gap announced in 2015 it was closing 175 stores. The brand has been on the upswing lately — it had a particularly good holiday season — and value of Gap’s shares are rising.