Closing signs of the times

So goes Macy’s…

The Financial Times summed up the news and the reasons behind it in one quick sentence:

Macy’s is closing 100 stores in the face of declining traffic in malls and stiff competition from online retailers.

That’s approximately 15 percent of the chain’s 728 stores nationwide. Whether that means a corresponding 15 percent layoff of Macy’s 172,000 employees remains to be announced, as are the locations of the store closings. They will, however be offered positions in nearby stores “where possible.”

Most of the stores on the list will close in the first quarter of 2017. “In a number of cases stores will be closed as the value of the real estate exceeds their value to Macy’s as a retail store,” the company said. It’s in talks to sell 250,000 square feet of real estate that houses its men’s annex in San Francisco’s flagship Union Square store and is “examining opportunities” in four other major markets.

Macy’s is far from alone. Kohl’s, Sears, Target and other big box retailers are closing stores and laying off employees. Sports Authority is shutting down altogether. Close to 44,000 retail workers have been laid off this year, including at 16,000 at Walmart which is closing 269 outlets this year. 
To round out the context, Walmart announced Monday it’s acquiring online shopping site Jet.com for $3.3 billion. And investors greeted the Macy’s news rapturously, sending its stock price soaring by 17 percent.

“I felt like we were going to reach a tipping point that would force a vicious, fundamental reset in the physical retail world and that’s what we’re seeing,” Richard Church, managing director for retail at the research firm Discern Group Inc., told the Los Angeles Times.

All is not yet lost in the bricks-and-mortar world, however. CNN Money points out retailers have added nearly 200,000 jobs this year, according to government statistics. “This category includes the struggling department stores, but also auto dealers, home improvement chains, supermarkets and ‘non-store retailers’ — a sub sector that includes Amazon and other e-commerce players.”