Macy’s has tapped CBRE to help with the “national disposition” of some of the 68 stores the retailer is closing.
“This partnership brings together two industry leaders, each with more than 100 years of history,” said Jack Durburg, CBRE Chief Executive Officer, the Americas. “We are honored to assist Macy’s, a storied retailer that helped create much of the American retail landscape, as it charts its course to a future of continued retail leadership.”
Macy’s announced on Tuesday that it will close 68 stores now and a further 30 over the next few years as it moves to cut costs and target resources at its most successful outlets.
In New York City – where the flagship store in Herald Square has been valued for as high as $4 billion – just one store will close, in Douglaston, Queens.
Last November, Macy’s formed a partnership with Brookfield Asset Management to create the “pre-development plan” that led to this week’s closure announcement.
Terry J. Lundgren, chairman and chief executive officer of Macy’s, said Tuesday, “It is essential that we maintain a healthy portfolio of the right stores in the right places. Our plan to close approximately 100 stores over the next few years is an important part of our strategy to help us right-size our physical footprint as we expand our digital reach.
“We are closing locations that are unproductive or are no longer robust shopping destinations due to changes in the local retail shopping landscape, as well as monetizing locations with highly valued real estate.”
The retailer expects the move to save $550 million annually from the closures. It will invest $250 million in growing its digital business, store-related growth strategies, Bluemercury, Macy’s Backstage and China.
On Top of the 68 Macy’s store closings (out of a current total of 730 Macy’s stores), three locations in San Francisco, Portland, Oregon and Minneapolis were sold, or are to be sold, and are being leased back. The company intends to opportunistically close approximately 30 additional stores over the next few years as leases or operating covenants expire or sale transactions are completed.
The appointment of CBRE to aid in the disposition of the stores comes following a strengthening of its flagship Retail Advisory & Transaction Services business line to include robust practices in several specialized sectors, including malls, urban retail and dispositions.
“CBRE has dedicated the resources and expertise to expand its dispositions business at a time when many retailers are optimizing their store portfolios to focus on their best-positioned, most-profitable operations,” said Brandon Famous, CBRE Senior Managing Director and Retail Leader, the Americas.
“Helping national retailers through this intricate process requires industry knowledge, location-analytics capabilities, capital-markets resources and relationships with investors and retailers on a scale that only CBRE can provide.”