Macy’s (NYSE: M) shares rose nearly 5 % Wednesday after the company reported better than expected holiday sales. Nonetheless, the company conducted its annual review in which it decided store closures were necessary.
The report stated there are 28 Macy’s stores set to be closed and one Bloomingdales’s. Macy’s administers 68 department stores and 190 specialty stores.
Same-store sales fell 0.6% in November and December. Additionally, at stores that the company has owned for a year, holiday sales fell 0.7%, Macy’s said on Wednesday.
Macy’s CEO Jeff Gennette, who took over the position in 2017, reported that consumers were reacting positively to the new merchandise and marketing put in place, specifically near Christmas.
In the fiscal third quarter, Macy’s had reported a decline in same-store sales, the first decline for the company in two years. It attributed the downturn to lack of foot traffic in stores and untimely warm weather, which affected the need for warmer clothing such as sweaters and jackets.
Department store sales fell 1.8% from November 1st through December 24th according to Mastercard Spending Pulse, which keeps track of retail spending through all payment methods.
In hopes of increasing in-store sales, some retailers offered big discounts in order to attract buyers, although it meant a lower profit margin. Industry experts suspect that more department stores will need to be shut done in order for the company to maintain profitability.
Macy’s has found itself going through several store closures in the last couple of years. Gennette admitted in November that the company was experiencing reduced performance at “lower-tier malls.”