The Great Retail Shift: Why Macy's Is Closing 66 Stores In 2025 And What Comes Next

The iconic American department store, Macy's, is currently undergoing a massive, multi-year transformation, a critical component of which involves a significant reduction in its physical footprint. As of December 23, 2025, the company is moving forward with its plan to shutter 150 underperforming stores across the United States by 2026, with a major wave of approximately 66 closures scheduled for 2025. This strategic move is not a sign of collapse but rather a calculated pivot toward a more profitable, digitally-focused, and smaller-format future, directly addressing the seismic shifts in the modern retail landscape. The closures are a direct result of the company’s "Polaris" growth strategy, a comprehensive plan announced several years ago to stabilize the business and pursue a return to sustainable growth. The goal is to divest from struggling, low-tier mall locations and concentrate capital and resources on the company's remaining 350+ highest-performing stores, as well as its rapidly expanding luxury and off-price brands, Bloomingdale's and Bluemercury.

The Polaris Strategy: A Calculated Retreat from the Mall Anchor

The decision to close dozens of full-line department stores is a painful but necessary step in Macy's Inc.'s long-term strategy, dubbed "Polaris." This initiative, first unveiled in 2020, is designed to optimize the entire store portfolio by focusing resources on the healthy parts of the business while directly addressing the unhealthy segments. The closure of 66 stores in 2025 represents the largest single tranche of the planned 150 total closures by the end of 2026. The primary intention behind this aggressive real estate strategy is to exit underperforming locations, particularly those anchoring struggling or "lower tier" shopping malls. By shedding these massive, expensive-to-operate stores, Macy's aims to improve its overall profitability and concentrate investment on a smaller, more productive fleet of flagship and top-tier mall locations. This allows the retailer to better compete with e-commerce giants and fast-fashion retailers.

Key Pillars of the Polaris Strategy:

• Store Portfolio Optimization: Closing 150 underperforming Macy's stores by 2026, including the 66 closures slated for 2025.
• Digital Acceleration: Investing heavily in e-commerce and omnichannel capabilities to ensure seamless customer experiences across online and physical stores.
• Brand Expansion: Accelerating the growth and footprint of high-performing luxury brands, specifically Bloomingdale's and the prestige beauty retailer Bluemercury.
• New Formats: Developing and rapidly expanding smaller, off-mall store formats to capture market share in new, convenient locations.

The Shift to Small-Format Stores: Market by Macy's

The narrative surrounding Macy's is not solely about closures; it is equally about aggressive expansion into new, smaller, and more nimble retail formats. This shift is a crucial component of the Polaris strategy, directly contrasting the traditional 200,000+ square-foot mall anchor. Macy's is actively accelerating the growth of its small-format store strategy, with plans to open up to 30 new locations across the country starting in 2024 and running through the fall of 2025. This expansion will potentially triple the footprint of this new concept.

The New Retail Footprint:

The new stores, often branded as "Market by Macy's," are significantly smaller, typically ranging from 20,000 to 50,000 square feet. They are strategically placed in high-traffic, off-mall locations, often anchoring grocery-anchored shopping centers. The "Market by Macy's" concept offers a curated, mobile-driven, and time-conscious shopping experience, focusing on localized assortments of the latest fashion trends, beauty products, and home goods. This format is designed to appeal to a more modern, convenience-focused shopper who has moved away from the traditional mall experience. This dual strategy—closing large, expensive legacy stores while opening smaller, more efficient modern stores—is Macy's bet on a profitable future. Other complementary formats include the expansion of Macy's Backstage (off-price stores) and the growth of the Bluemercury beauty chain.

Impact on Communities and the Retail Landscape

The closure of 66 Macy's stores in 2025 will have a profound impact on the affected communities and the broader retail ecosystem. Macy's stores are often major employers and significant sources of tax revenue for their respective cities and counties. The closures will inevitably lead to job losses and create large, vacant "big box" spaces within shopping malls. The company is expected to hold massive clearance sales at the closing locations, providing last-chance opportunities for consumers to purchase merchandise at deep discounts. While challenging for employees, these closures signal a definitive shift in the retail industry: the traditional department store model, particularly in lower-performing malls, is no longer sustainable.

Entities and Topical Authority:

The strategic moves by Macy's are being closely watched by numerous entities across the retail and financial sectors:

• Macy's, Inc. (Parent Company)
• Bloomingdale's (Luxury Brand Expansion)
• Bluemercury (Prestige Beauty Expansion)
• Market by Macy's (New Small-Format Concept)
• Macy's Backstage (Off-Price Concept)
• Retail Real Estate Investment Trusts (REITs) (Owners of the affected malls)
• Simon Property Group (Major mall owner)
• General Growth Properties (GGP) (Major mall owner)
• E-commerce Platforms (The primary competition)
• Amazon (Key competitor)
• Target and Walmart (Omnichannel competitors)
• Kohl's and Nordstrom (Department store competitors)
• The Polaris Strategy (The core business plan)
• Omnichannel Retailing (The focus of investment)
• Department Store Model (The model being redefined)
• Commercial Real Estate Market (Impacted by the massive vacancies)
• Supply Chain Logistics (Optimized by focusing on fewer, better stores)
• Investor Relations (The focus of the transformation)
• Digital Transformation (A key driver of the strategy)

The closures are not merely an ending, but a new beginning for Macy's. By aggressively streamlining its physical assets and investing heavily in its digital presence and smaller, more efficient formats like "Market by Macy's," the retailer is attempting to ensure its survival and relevance in the ever-evolving 21st-century retail environment. The 66 stores closing in 2025 are the cost of admission for Macy's to secure a place in the future of retail.

Detail Author:

• Name : Anibal Hodkiewicz
• Username : lwehner
• Email : twunsch@yahoo.com
• Birthdate : 1973-12-17
• Address : 54156 Reichel Club North Petechester, DE 55233-1448
• Phone : +13807327959
• Company : Bradtke and Sons
• Job : Dentist
• Bio : Vitae sint libero veritatis nobis vitae nesciunt similique. At deleniti et qui commodi sit quo. Et numquam et et nam autem asperiores. Quam est architecto dolore nostrum.

Socials

instagram:

• url : https://instagram.com/vdietrich
• username : vdietrich
• bio : Ab cupiditate qui totam quidem nihil qui fugiat. Aliquam odio est doloremque voluptas et.
• followers : 2699
• following : 483

facebook:

• url : https://facebook.com/verda_real
• username : verda_real
• bio : Non rem molestias sit sapiente sint itaque.
• followers : 114
• following : 326

twitter:

• url : https://twitter.com/verda1792
• username : verda1792
• bio : Itaque est debitis est non molestias earum. Quos sunt tempore autem voluptate. Fugiat sapiente sed sunt cupiditate. Occaecati nesciunt dolorem voluptatem ut.
• followers : 4487
• following : 2901