Macy's to close 150 stores as sales slip as it pivots to luxury at Bloomindale's and Blue Mercury

NEW YORK (AP) — Macy's will close 150 stores, 50 this year it said Tuesday, after posting a fourth quarter loss and declining sales.

While adjusted net income and revenue topped Wall Street expectations, the company offered a muted outlook for the year. Shares slipped 2% before the opening bell.

The department store chain faces a proxy fight from Arkhouse Management which nominated a slate of nine director for election to Macy's board last week. Last month, Macy's rejected a $5.8 billion takeover offer from the hedge fund and Brigade Capital Management, an investment manager.

Activist investors and pressure to increase sales are just two critical issues facing new CEO Tony Spring, who succeeded Jeff Gennette last month.

Even before the pandemic, department stores were facing intense competition from online rivals. Neiman Marcus and JCPenney both filed for Chapter 11 bankruptcy protection.

Consumers have proven resilient and willing to shop even after a bout of inflation, though behaviors have shifted, with some Americans trading down to lower priced goods.

Macy’s, which also runs upscale Bloomingdale’s stores as well as Bluemercury beauty stores, is maneuvering to shore up sales by accelerating the expansion of small-format stores that can provide more convenience to its customers. It announced plans in October to add up to 30 small-format locations through the fall of 2025, bringing the total number to roughly 42. The next round of expansion starts in the fall.

Yet Macy's is still cutting jobs to bring down its costs. In January, Macy's said it would trim about 3.5% of its total workforce, roughly 2,350 employees, and the iconic department store is closing five locations.

Arkhouse and Brigade offered $21 for each of the remaining shares in Macy’s they don’t already...