What: Macy's is experiencing strong demand for its real estate assets, leading to an increase in planned store closures and sales from 50 to 55 this fiscal year, as part of its "Bold New Chapter" turnaround plan.

Why it is important: The strong demand for Macy's real estate assets could provide significant financial resources to fund its ongoing transformation efforts.

Macy's is reporting strong interest in its real estate assets, prompting an increase in planned store closures and sales from 50 to 55 this fiscal year. This is part of Macy's "Bold New Chapter" turnaround plan, which aims to close 150 stores through fiscal 2026 and monetize real estate holdings to optimize its fleet and improve profitability.

CEO Tony Spring emphasized that while these locations underperform relative to the total fleet, they remain valuable real estate assets.

This strategy reflects broader trends in retail, where department stores are reducing their footprints due to challenges from e-commerce, discounters, and changing consumer behaviors. Despite these challenges, Macy's properties remain attractive to buyers, partly due to the low U.S. retail vacancy rate of about 4%.

Macy's is focusing on its 350 top-performing "go-forward" locations while monetizing other holdings. The company aims to obtain $750 million from property sales through fiscal 2026. This approach allows Macy's to divest underperforming stores while reinvesting in customer service, staffing, and merchandise at remaining locations.

The strong demand for Macy's properties could benefit other department store chains, their landlords, and lenders looking to dispose of similar assets. Past buyers have repurposed these spaces by dividing them, redeveloping for other uses, or demolishing them entirely.

While executing this real estate strategy, Macy's is also implementing other initiatives, such as improving its "First 50" stores, which are outperforming the rest of the chain. However, the company faces ongoing challenges, including declining overall sales and pressure from activist investors.

Macy’s Sees Demand for Its Stores on sale