| Back in August, the company announced plans to close about 100 stores. Last week, it identified about two-thirds of the locations that will be shuttered. It is expected that they will close within a few months.
The objective of the closures is most likely to eliminate under-performing locations, but there is a silver lining, and that being the company can free up lots of cash by liquidating the real estate it owns. According to the Fox Business article, “A few of the stores that Macy’s is closing this year are getting the ax specifically because they are sitting on valuable real estate. Selling these will generate the vast majority of Macy’s real estate proceeds. On the other hand, most of the stores slated for closure are located in subpar malls and thus aren’t worth very much… The top 150-200 properties in Macy’s real estate portfolio (out of its more than 700 locations) account for the vast majority of its real estate value. However, these stores are strongly profitable despite the company’s recent struggles.” According to some experts, Macy’s flagship store in NYC on 34th Street could be worth $4 billion. Macy’s has been selling-off some of its city-center real estate: in November, Macy’s announced that it was selling the building containing its men’s store in San Francisco for $250 million and leasing it back, freeing up a chunk of cash. Macy’s also reported that it had signed a contract to sell its downtown store in Portland, Oregon, for $54 million, which will be closing in the next few months. The company also chose to close its Minneapolis flagship store and sell the property, with a value of approximately $40 million.
Stores Closing in the NY/NJ/PA Region
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