Macy’s is opening more small stores in the West and Northeast in a bid to lure new customers

By ANNE D’INNOCENZIO
AP Retail Writer

NEW YORK (AP) — Macy’s is expanding its small-store format into the West and Northeast, looking to offer more convenient shopping, increase customer visits and add new shoppers.

The department store chain said Tuesday that last month it opened a location in Highland, Indiana, and plans to open small stores in Boston, Las Vegas and San Diego in coming weeks, bringing the total number of its small-format stores to 12. The new stores range in size from 30,000 to 50,000 square feet, roughly one-fifth the size of its regular department stores

Macy’s said the four new stores will bear the iconic brand’s nameplate, but the other eight stores will still be called Market by Macy’s. The department store opened its first small-format store in 2020 in the Dallas-Fort Worth area. Macy’s operates little more than 500 stores under the namesake brand.

Nordstrom, Kohl’s, Macy’s upscale sister Bloomingdale’s, as well as big box stores like Target, have been expanding to small formats for several years. But the trend gained momentum after the pandemic shifted more shopping to the suburbs and away from cities.

Macy’s smaller department stores are not in traditional malls but rather in strip centers anchored by discount stores. They offer a slimmed-down assortment of trendy and basic fashions, as well as beauty and fragrances, along with services that allow shoppers to pick up online orders at the store.

Macy’s noted that these small stores opened more than one full fiscal year achieved positive comparable sales including licensed businesses.

The announcement came as the department store separately reported that it had to heavily discount spring goods to make room for fresh fall and holiday merchandise amid customers’ cautious spending, but adjusted profits and sales for the fiscal second quarter still beat Wall Street expectations. Overall, comparable sales — those from stores and digital channels opened at least a year — were down 7.3% in the quarter. The figure includes licensed owned businesses like cosmetics.