As Macy’s announces plans to close nearly a third of its stores by early 2027, the impact of these closures will be felt not only by the retailer itself but also by the malls and communities where these stores are located. The decision to shutter approximately 150 Macy’s locations will undoubtedly spark change in the retail landscape across the United States, with some unexpected transformations in store for shoppers.
Macy’s CEO Tony Spring revealed that the stores slated for closure represent 25% of the company’s gross square footage but less than 10% of its sales. This strategic move is part of Macy’s plan to invest more in its remaining 350 namesake stores and focus on expanding its higher-end department store Bloomingdale’s and beauty chain Bluemercury.
The closures of Macy’s stores will serve as a catalyst for malls to evolve in response to changing consumer preferences and the rise of online shopping. Chris Wimmer, a senior director at Fitch Ratings, believes that the closure of underperforming Macy’s locations will ultimately benefit malls and customers alike. The exit of Macy’s will allow healthier malls with better locations and stronger owners to revitalize their shopping centers and attract new tenants.
With Macy’s owning the majority of its namesake stores, the closures will also open up opportunities for real estate developments that better align with the changing demographics and economy of their surroundings. From medical buildings to retirement communities to grocery stores, the vacant Macy’s locations could be repurposed to meet the needs of the local community.
However, not all closed Macy’s locations may be easy to repurpose, and some malls may struggle to find new tenants to fill the void left by the department store. In some cases, the closure of Macy’s could be the final blow for struggling malls that are already on the decline.
The downsizing of department stores like Macy’s is part of a larger trend in the retail industry, where malls are seeing a shift in the types of tenants they attract. As more customers opt to shop online, retailers are looking to suburban strip centers rather than traditional malls. This shift has led mall owners to diversify their tenant mix with non-retail offerings such as medical buildings, co-working spaces, and restaurants to drive foot traffic.
Former Macy’s locations have the potential to be transformed into a variety of spaces that may surprise longtime mallgoers. From apartment complexes to entertainment wings with restaurants and activities like laser tag and rock climbing, the closures of anchor stores like Macy’s have paved the way for innovative projects that breathe new life into malls.
Major mall owners like Brookfield Properties have already embarked on ambitious projects to repurpose former Macy’s locations. At malls like Stonestown Galleria in San Francisco and Tysons Galleria in Washington, D.C., former Macy’s spaces have been transformed into a mix of retail, dining, and entertainment offerings that appeal to a broader audience.
In conclusion, the closure of Macy’s stores will undoubtedly have a significant impact on malls and communities across the U.S. While the closures may signal the end of an era for some struggling malls, they also present an opportunity for revitalization and transformation. By repurposing former Macy’s locations into innovative spaces that cater to changing consumer preferences, mall owners can adapt to the evolving retail landscape and create vibrant destinations that attract shoppers and tenants alike.