Weekend Briefing: Fashion companies are slashing costs and closing stores to reach profitability

10 months ago 22

Macy’s is closing 150 stores in the next few years and The RealReal reached profitability by cutting costs, reflecting a trend in fashion where reining in costs becomes the clearest path to profits. Don’t forget to subscribe to the Glossy Podcast for interviews with fashion industry leaders and Week in Review episodes and the Glossy Beauty Podcast for interviews from the beauty industry. –Danny Parisi, sr. fashion reporter

The fashion industry tightens its belt

Macy’s is the latest major fashion company to announce a significant downsizing. Last week, the company laid out a plan to close 150 stores over the next few years, starting with 50 stores closing this year. According to Macy’s, these stores were underperforming, accounting for 25% of the company’s retail footprint but only 10% of sales.

The freed-up resources will instead go to revamping the remaining stores, hiring more talent and renovating their interiors to be more luxurious. In the same time period, it will open 15 Bloomingdale’s stores and 30 Bluemercury stores — both retailers offer more expensive goods than Macy’s mainline stores.

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