CINCINNATI — Four years after Macy’s Inc. closed its downtown Cincinnati headquarters, fresh turmoil at the nation’s largest department store chain is threatening the region again.
The company announced the elimination of 2,350 corporate jobs in late February and the closure of 150 stores in the next three years, continuing a long-term trend of downsizing by brick-and-mortar retailers.
The latest cuts come as Macy’s faces a new takeover threat: Investment firms Arkhouse Management and Brigade Capital Management are offering $6.6 billion for the company, with the goal of maximizing profits by selling off its real estate.
Macy’s declined to comment on how its restructuring will impact Cincinnati.
But retail expert Nick Egelanian said it’s likely to lead to the loss of Macy’s stores in Anderson Township and Florence.
“I think Kenwood’s the only survivor when it’s all said and done,” said Egelanian, president of SiteWorks Retail Consulting Services in Maryland.
In a conference call with Wall Street analysts on Feb. 27, Macy’s CEO Tony Spring said the company has adopted “more stringent” standards for keeping under-performing stores open.
“In the past, we may have continued operating an underproductive store that was four-wall cash flow positive,” Spring said. But now, “we have compared value to operate versus value to close and look at demand in each market to determine the right construct of stores and digital with a focus on being in the strongest centers.”
Snow said the 150 stores targeted for closure represent 25% of Macy’s total square footage, but less than 10% of its sales. He expects the company will generate up to $750 million in cost savings and asset sales to reinvest in the 350 stores that remain and expand its luxury stores, Bloomingdales and Bluemercury.
Egelanian doubts the strategy will work.
“I think Macy’s has to get down to 100, 150 stores, primarily on the coasts,” he said. “And it has to reinvent the experience in the stores. They have to apply capital … to make going into that store meaningful when you’re at a mall like Kenwood.”
Macy’s shopper Barbara Alford hopes Egelanian is wrong about that.
“I would miss the shopping experience of Macy’s,” said the Cold Spring, Ky. resident who visits Macy’s Anderson store about twice a month. “I just feel like we’re losing a lot as time goes by. You know, Amazon has taken a lot of the business from these retail stores. And it is convenient to shop at Amazon but you just don’t get the same experience.”
Anderson Township would also miss having a Macy’s, said Steve Sievers, assistant township administrator for operations.
“That Macy’s store is a fantastic anchor for the Anderson Town Center,” Sievers said. “It’s been there since the mall opened in the late ‘60s. It’s definitely a draw to Anderson. We’re fortunate to have one of the three Macy’s left in the metro market, one of 15 in Ohio.”
Sievers said Macy’s has told the township the store is profitable. He thinks it has done a great job of staying relevant over time.
“They’ve continued to invest, opening a few years ago the Backstage on the second floor and kind of reinventing how they handle that space,” Sievers said, “They’ve used the third floor for storage for years. So they’re trying to utilize everything they can out of that.”
Beyond store closures, Macy’s restructuring is likely having an impact on office locations that the company occupies in Springdale and Mason.
When it closed its downtown headquarters in 2020, Macy’s told WCPO that Greater Cincinnati would see a net gain of nearly 600 jobs to 3,600 — including call center, corporate and store employees. Since then, it has closed the Tri-County store and allowed many corporate employees to work remotely.
Hamilton County records show Macy’s amended its lease for the former Avon headquarters on Progress Place in Springdale to occupy 32,000 additional square feet of storage space, bringing its total footprint to 229,000 square feet. But a Macy’s employee told WCPO the company is offshoring more than 300 Springdale jobs to India.
Macy’s declined to answer questions about that or say how many local employees it currently has. In the meantime, former Macy’s executive Carl Goertemoeller has noticed another change in the company’s approach to Cincinnati.
“I was looking at some type of marketing piece for Artswave,” said Goertemoeller, executive director of the University of Cincinnati’s Real Estate Center. “In the past, you would see Macy’s all over that as a prime sponsor. Now their name’s no longer to be found. It’s a shame because they were such terrific corporate citizens for so long.”
