An American department store chain, Macy’s, has confirmed plans to close 65 stores this year, an increase from the 50 locations it had previously announced would shut by the end of its fiscal year.
The closures form part of a broader strategy to eliminate approximately 150 underperforming stores within the next three years.
The update was revealed during the department store chain’s third-quarter earnings call on Wednesday. “We now expect to close roughly 65 locations this year,” Macy’s CEO Tony Spring stated. “In line with our typical cadence, closures will occur post-holiday.”
The announcement comes amid the fallout from an accounting scandal that delayed the release of Macy’s third-quarter earnings.
The company disclosed that an employee had hidden up to $151 million in expenses related to delivering small packages.
Macy’s, which also owns Bloomingdale’s and Bluemercury, reported last month that the issue was discovered in one of its accrual accounts while preparing its financial statements.
New details shared on Wednesday revealed that “a single employee with responsibility for small package delivery expense accounting intentionally made erroneous accounting accrual entries and falsified underlying documentation,” according to a filing with the Securities and Exchange Commission.
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Macy’s COO and CFO Adrian Mitchell clarified, “The error was not theft, and there was no impact to revenues, cash, or inventories as all vendors were fully paid.”
Macy’s stated it is implementing changes to its financial reporting controls in response to the incident.
The company’s accelerated store closures reflect a challenging retail environment. Department stores, in particular, continue to struggle as fewer shoppers visit malls and more Americans turn to online shopping.
According to data from research firm CoreSight, U.S. retailers have announced over 7,100 store closures through the end of November 2024, a 69% increase compared to the same period in 2023. Furthermore, 45 retailers have filed for bankruptcy this year, nearly double the total for 2023.
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