Macy’s is laying off 1,000 workers as it shuts down two Connecticut fulfillment centers in a move to “modernize our supply chain to better serve customers, while simplifying how we operate,” the company stated.

This followed Macy’s announcement that it would close 14 underperforming stores this year, after shuttering 66 in 2025 and 55 the year before. After the next round of closures—most expected in the first quarter—the company will be 80% of the way toward its goal of 150 closings that was outlined in the “Bold New Chapter” turnaround plan presented by CEO Tony Spring in February 2024.  

According to an internal memo reviewed by WWD, Spring stated, “In executing our strategy, we continue to review our portfolio and make careful decisions about where and how we invest, including closing underproductive stores and streamlining operations.” He also said the company will provide support to impacted employees, including transfer opportunities where available, as well as severance and outplacement services.  

While layoffs and store closings are the most painful part of the Bold New Chapter strategy, other elements of the plan are beginning to show results—and customers are liking the changes they see. 

“Macy’s has worked hard to make investments and move the proposition forward, and it is being rewarded with better results. This gives management confidence in keeping stores open and continuing to evolve them for the customer,” Neil Saunders, managing director GlobalData’s retail division, shared with me. 

The Plan

The Bold New Chapter plan was Spring’s opening salvo to set the stage for renewed company-wide growth after taking over as CEO, following a year as Macy’s Inc. president and nearly a decade as Bloomingdale’s chairman and CEO.

The plan covered optimization and simplification of enterprise-wide backend operations, as well as plans to open 15 new luxury Bloomingdale’s stores and 30 Bluemercury stores, its specialty beauty chain that goes head-to-head with Ulta and Sephora. 

But the main focus of the strategy was to turnaround the Macy’s flagship, which had been languishing under sharply declining comparable sales—down 3.3% in fiscal 2022 and off 6.6% in fiscal 2023. Macy’s Inc. does not report revenues by company.

Besides closing 150 underperforming stores, critical levers of Macy’s turnaround plan included revitalizing the merchandise assortment for relevance and value and modernizing the shopping environment for frictionless customer experiences across channels. 

Following the difficult decision to shutter 150 stores, the company identified a slate of 350 stores as go-forward locations. From that group, it identified a subset of stores—originally 50 but since expanded to 125 stores—to serve as pilot locations for the Bold New Chapter transformation and as proof of concept. 

Results Showing

The stores selected for the first makeovers, now called “Reimagine” stores, started delivering positive results almost immediately. Most recently, in the third quarter ended November 1, the Reimagine stores reported a 2.7% comparable sales increase, while Macy’s entire fleet of go-forward locations saw 2.3% comp sales growth.

In a new year’s letter reporting progress, Spring said Macy’s latest results prove that the investments in elevated merchandising, store design and customer experience are paying off, challenging Tom Peters’ widely quoted maxim, “You can’t shrink your way to greatness.” 

Guidance Raised

Positive results in the third quarter prompted the company to raise its year-end guidance. Net sales are expected to reach $21.5 billion to $21.6 billion, up from $21.2 billion at the low end of previous guidance. Adjusted EBITDA as percent of revenue will range between 7.8% to 8.0%, up from 7.4% at the low end and adjusted diluted earnings per share between $2.00 and $2.20, up from the low end of $1.70.

“Nearly two years into our Bold New Chapter strategy, the focus of our work remains the same: strengthen our stores, simplify how we operate and invest in experiences that matter most to our customers,” Spring said.

He added that disciplined execution is what drives continuous improvement—not unlike a program to get physically fit. Finding the discipline to exercise is hard, and working new muscles can be painful at the outset. But continuous repetition delivers results. The same principle applies in business. Spring is getting Macy’s into fighting shape for long-term success.