Jul 20, 2022 - Economy

Macy's to open its first-ever smaller footprint discount store

photo of The World's Largest Store billboard on Macy's 34th street

Macy's department store in New York City. Photo: Yuki IWAMURA / AFP via Getty Images

Macy's is shrinking in size and spread.

Why it matters: Department store appeal continues to dissipate as shopping habits change rapidly.

Driving the news: Macy's today announced "an acceleration" of its strategy to open smaller size stores, move out of malls and grow its discount business.

Details: The chain will open its first-ever, small-footprint discount store later this year near Chicago.

  • It's a combination "Market by Macy's" and "Macy's Backstage."
  • Market by Macy's shops are about one-fifth the size of regular locations.
  • Macy's Backstage is the company's T.J. Maxx competitor.

The big picture: Macy's has been opening smaller Market by Macy's stores in open-air shopping centers even as it plans to close about 60 more department stores by next year.

  • The Market by Macy's locations (currently five, with three more to come by year end) often have more frequently updated products and less inventory to manage.

What to watch: Shopping centers are helping revive physical retail, according to the WSJ.

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