(The Epoch Times)—Retail chains Macy’s and Kohl’s are set to shut down nearly 100 stores across the country, with the decision following several quarters of negative year-over-year revenue growth.
Macy’s is closing 66 stores across 22 states in an effort to “return the company to sustainable, profitable sales growth,” the retailer said in a Jan. 9 statement. Out of the 66 outlets, two have already been closed. A majority of the stores are expected to be closed during the first quarter of 2025. Meanwhile, Kohl’s announced plans to shutter 27 “underperforming stores” across 15 states by April this year.
Macy’s year-over-year quarterly revenue growth registered declines for the past 10 consecutive quarters. The retailer’s “Bold New Chapter” strategy plans to shut down 150 unproductive stores while “investing in its 350 go-forward Macy’s locations through fiscal 2026,” the statement said.
Macy’s CEO Tony Spring said that closing unproductive outlets would “allow us to focus our resources and prioritize investments in our go–forward stores, where customers are already responding positively to better product offerings and elevated service.”
Shares of the company were down by more than 15 percent over the past year.
As for Kohl’s, most of the closures are set to take place in California, with 10 outlets shutting down in the state.
In addition, the company aims to shutter its San Bernardino E-commerce Fulfillment Center (EFC) in May, when the facility’s lease term expires. It is one of the 15 EFCs and distribution centers linked to the company across the United States.
Kohl’s justified the decision, saying it is in a position to fulfill orders without the San Bernardino facility.
“All associates have been informed, and offered a competitive severance package or the ability to apply to other open roles at Kohl’s,” it said.
Kohl’s quarterly revenues have registered a year-over-year decline for 11 straight quarters. Over the past year, the company’s shares have crashed by more than 51 percent.
Tough Business Conditions
Several companies have slashed store counts, shuttered divisions, or filed for bankruptcy in recent months, citing profitability and cost challenges.
This week, REI, a specialty outdoor retailer, said the company was exiting from its Experiences business, which included day tours and adventure travel. CEO Eric Artz said the segment “costs significantly more to run than it brings in.”
“When we look at the all-up costs of running this business, including costs like marketing and technology, we are losing millions of dollars every year and subsidizing Experiences with profits from other parts of the business,” he said.
Last month, party goods retailer Party City announced filing for Chapter 11 bankruptcy and shuttering almost 700 stores nationwide after being in business for almost four decades.
The company said the decision was taken to ensure continued operations while it faced an “immensely challenging environment driven by inflationary pressures on costs and consumer spending, among other factors.”
In October 2024, convenience store chain 7-Eleven announced closing 444 underperforming stores to boost efficiency and manage costs.
According to a report from S&P Global, U.S. corporate bankruptcies hit a 14-year high in 2024, registering 694 filings. S&P’s bankruptcy calculations only consider large companies that exceed certain asset and liability thresholds.
“Businesses continued to face pressure in 2024 from elevated interest rates, especially as total debt among credit-rated non-financial U.S. companies reached a quarterly record of $8.453 trillion,” the report said.
“While some relief came in September when the U.S. Federal Reserve began lowering its benchmark interest rate from a 20-year high, the central bank’s monetary easing may slow in 2025.”
Overall commercial Chapter 11 bankruptcies rose by 20 percent in 2024, according to a Jan. 3 statement from the American Bankruptcy Institute. Michael Hunter, vice president of bankruptcy data provider Epiq AACER, said he expects the filing growth to continue throughout this year.
“If the current trend continues, new bankruptcy filings will return to pre-pandemic normalized volumes over the next 24–30 months,” he said.
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