Wall Street cheered last week when Macy’s announced that it would be shuttering 100 stores and investing in digital retail. The company’s stock, which had been trading around $34, jumped to over $40 as investors saluted the decision to return sales per square foot to pre-recession levels by cutting back on brick-and-mortar operations, which will cost some employees their jobs but better position the company for growth.
Now analysts are asking who’s next. To achieve circa 2006 profitability levels, as Macy’s aims to do, both J.C. Penney and Sears would have to close over 300 stores, according to research firm Green Street Advisors. By that same logic Nordstrom, which is preparing to take on Macy’s on its home turf, would have to close 25 stores, Greet Street says.
Macy’s and its peers are struggling to compete with online retailers like Amazon. But as Bloomberg notes, they are also suffering from a retail real estate glut: “America has more retail square footage than Australia, the U.K., Germany, and Mexico combined.”