Fate of Minnesota Macy's stores is anyone's guess

Macy's shoppers
People wait to cross the street after shopping at Macy's department store in this 2012 file photo.
Andrew Burton | Getty Images file

Macy's announced Thursday that it plans to close about 100 stores next year, but the retailer isn't saying which ones will be shut down.

Local commercial real estate firms say they haven't heard how the 11 Minnesota stores may fare.

Past remarks by Macy's officials suggest the downtown Minneapolis store would likely survive, said Steve Cramer, president and CEO of the Minneapolis Downtown Council.

"They considered it one of their four legacy stores along with San Francisco, Chicago and New York," he said. "So, that was good company to be in. But beyond that, I really haven't heard anything about sales performance or what they're thinking."

Last November Macy's said it would seek partners to redevelop the Minneapolis real estate and the other flagship locations to add other uses to the retail operations.

Macy's closed 40 stores this spring.

The company, which also operates Bloomingdale's stores, said it would increase its exclusive products and would prioritize its investments in the stores that offer the highest growth potential.

"The announcements we are making today represent an advancement in our thinking on the role of the stores, the quality of the shopping experience we will deliver, and how and where we reinvest in our business for growth," said Macy's President Jeff Gennette, who will succeed Terry J. Lundgren as CEO early next year.

Macy's had been a stellar performer since the Great Recession, but in the past year and a half has seen slowing sales as it contends with competition on all fronts and changing shopping patterns.

People are spending more on home improvement as well as experiences like travel or spas. And when they do buy clothing, they're going to T.J. Maxx or fast-fashion chains like H&M. They're also increasingly researching and buying online, and gravitating toward Amazon.com, which is bolstering its own fashion labels.

Amazon.com is by some forecasts expected to surpass Macy's as the largest online seller of clothing next year.

With the store closures, Macy's will have 666 stores, including 38 Bloomingdale's locations. That's down about 23 percent from the January 2007 peak of 868 total. Annual revenue at the stores Macy's plans to shutter were estimated at about $1 billion.

Many of the stores will close in early 2017, with the balance closing as leases or other agreements expire or are amended. The company has not specified which locations, but said it will still have a presence in virtually all major markets.

Macy's has been under pressure from investors to sell some of its valuable real estate. Chief Financial Officer Karen Hoguet told analysts the company is in talks with potential buyers of its San Francisco men's store. The plans are for that operation to be combined into its main Union Square store. It's also looking at Herald Square in New York, State Street in Chicago and downtown Minneapolis, Hoguet told analysts.

The Associated Press contributed to this report.

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