Department store Macy’s is looking to experiment with small-format stores as malls continue to suffer from low levels of foot traffic during the pandemic.
“We continue to believe that the best malls in the country will thrive,” said CEO Jeff Gennette. “However, we also know that Macy’s and Bloomingdale’s have high potential [off]-mall and in smaller formats.”
The company plans to test out several smaller format Macy’s stores outside mall locations and further grow Macy’s Backstage, which is its off-price business. The department chain also has plans to roll out Bloomingdale’s stores outside mall locations, CNBC reported.
Macy’s announcement comes nearly eight months after it announced its plans to shutter 125 stores over the next three years. As of Q2, the company had 771 store locations, which included Bluemercury and Bloomingdale stores.
The company still plans to shutter those store locations, but may adjust the timeline depending on stores’ performance and growth in competition, Gennette said.
Macy’s stock was reportedly trading 3 percent higher after the company reported a narrower-than-expected loss and strong sales last week, resulting from a boost in its online business.
Other players in the space such as Target have also experimented with small-format stores over the past few years and have seen higher returns on investment as compared to big store locations.