Macy's Inc. reportedly is testing smaller stores in an effort to save money.
Macy's is currently turning four of its stores into "neighborhood" locations with less square footage, The Wall Street Journal reported.
Faced with too much space and too few shoppers, the 160-year-old retailer plans to reduce the amount of merchandise and the number of employees at its slower-performing stores—walling off entire sections at some locations and leaving the space empty, the Journal reported.
It's still unclear what the department store chain will do with the unused space, the Journal said.
The department store chain is, meanwhile, taking 350 more productive stores and giving them a facelift, with Starbucks coffee shops and remodeled dressing rooms, CNBC.com explained.
"If your store is too big and your dollars per square feet are too low and you can't lease the space to someone else, then you've got to hive off a floor," Macy's CEO Jeff Gennette told the Journal in an interview. "If we were building stores today, we'd build them smaller."
Macy's stock (M) lost 73 cents, or 2 percent, Monday to close at $37.05. In the last year, it has hit a high of $41.99 and a low of $18.80.
Macy's is among the retailers gearing up for the holiday shopping season.
The company, like its department store peers, has been investing heavily to beef up its online presence and lure back shoppers who had shifted to rivals such as e-commerce giant Amazon.com Inc., Reuters reported.
Macy’s online business clocked double-digit growth in the second quarter, with sales through its mobile app rising more than 50 percent in the first half of its fiscal year from a year earlier.
“There’s a lot of optimism among retailers for the holidays, but a lot of them are waiting for after Thanksgiving to assess exactly what they need in terms of temporary hires,” Neil Saunders, Managing Director of GlobalData Retail said.
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