Earlier this year, in our Behind the numbers segment, we reported on the latest episode in the Macy's series. A few days later, the group appointed Tony Spring as CEO, replacing Jeff Genette, who had taken up the position of Executive VP from 2021 to prepare for this succession. The objective? Counter the chain's decline.

Since 2015, the chain, which also includes Bloomingdale's and Bluemercury stores, has been suffering from an inexorable weakening in sales. From that year's record ($28.1 billion), revenues fell to $23.1 billion over the last fiscal year, and net income fell from $1.5 billion to $105 million over the same period. Macy's is benefiting from the rise of e-commerce, the growing dislike of shopping malls and the oversizing of its stores.

Source: MarketScreener. Macy's financial information here

During yesterday's publication of annual results, with sales forecasts well below investor expectations, the new CEO announced drastic measures to turn things around and silence activist shareholders (notably those of Arkhouse Management, who are attempting to storm the group's board of directors).

By 2026, 150 Macy's general stores will be closed (i.e. 30% of the total), in favor of the opening of smaller Bloomingdale's (15) and Bluemercury (30) stores, more focused on luxury and therefore better able to cope with the slowdown in growth. The company is even considering abandoning its San Francisco flagship, to capitalize on the real estate value of the property.

The shift is accompanied by a more comprehensive rationalization effort, a reduction in costs and capital expenditure, and a raised cash flow target. The announcements have pleased the market, with the stock rebounding by 4% over the last 5 days. It will take more than that to get back to the share's 2015 highs of $72, the stock having shed 72% since those all-time highs.