Macy’s, the department store company that also owns Bloomingdale’s and Bluemercury, announced Tuesday that net sales in 2020 fell 29 percent to $ 17.3 billion. This underscores the impact of the pandemic on shopping malls and clothing stores.
The retailer posted a net loss of $ 3.9 billion for the fiscal year ended Jan. 30, compared with a profit of $ 564 million a year earlier. However, the company expects “2021 to be the year of recovery and rebuilding,” with momentum picking up in the second half, particularly after a better-than-expected fourth quarter and a Christmas sales season that has been profitable, despite sales declining 19 percent from the previous period one year ago.
With more than 700 stores, Macy’s is often viewed as a barometer of the health of department stores, shopping malls, and American consumers. On Tuesday, executives stressed that Macy’s will grow its digital business, which is expected to reach $ 10 billion in sales over the next three years, move out of underperforming American malls and expand its off-price chains like Macy’s Backstage with TJ Maxx and Nordstrom Rack to compete. It also tests stores outside of malls.
Although the company’s sales have increased in areas such as household, luxury skincare and fragrances, “all apparel remains in question,” said Jeff Gennette, Macy’s chief executive, on an earnings call on Tuesday. “While we do well in the casual categories, the clothing categories remain depressed.”
Mr Gennette said Macy’s has had a “ramp-up” strategy with vendors to move into new inventory if the company sees signs of improvement, if vaccinations increase and customers start booking events like weddings again.
Even before the pandemic, Macy’s was under pressure. Last February, the New York-based company announced that it plans to close about 125 of its least productive stores and cut about 2,000 corporate and support roles in three years. Sales in 2019 had dropped to $ 24.6 billion from $ 25 billion a year ago, and the company’s declining inventory led to its removal from the S&P 500 last year.
Many consumers stayed away from malls and department stores in the past year and bought far fewer clothes in a newly isolated world. Macy’s place in American culture was also severely impacted as the outbreak reduced the annual fireworks display and Thanksgiving parade in New York.
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