John123
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John123 in Gainers & Losers,

Macy's to close more stores in turnaround push, stock jumps 17%

Macy's Inc (M) said it plans to shutter 100 more stores, representing about 14% of its total, as it tries to turn around its business after six quarters of falling sales.

The closures are the latest in a long list of moves to spur growth as department stores such as Macy's continue to battle with online retailers such as Amazon.com Inc and discount stores like TJX Cos Inc.

Consumers are also spending more on big-ticket items such as electronics and cars than they are on clothes, further pressuring sales at department stores.

Macy's sales fell nearly 4% during the second quarter, it said on Thursday, but that was better than analysts had expected and helped to send its shares and those of other department stores higher.

Macy's said it would close most of the stores by early 2017, which would be the fastest pace at which the company has closed stores after shutting a net 77 stores over the past six years.

The company did not identify the store locations, but said the 100 mostly underperforming stores would represent annual net sales volume of about $1 billion.

Macy's is under pressure from activist investor Starboard Value LP to unlock value in its properties and on Thursday said it would keep trying to monetize real estate at its flagship and mall-based locations, including the iconic Herald Square store in New York. It is in talks to sell its Men's Store on Union Square in San Francisco for redevelopment.

Over the past year, the company has also announced plans to open discount stores in the United States, start new stores that will sell luxury beauty products, and offer same-day delivery services in more U.S. markets than Amazon.

While apparel sales were stronger in the quarter reversing trends from the prior three quarters, sales of handbags, fashion jewelry and watches continued to be weak, Chief Financial Officer Karen Hoguet said on a call with analysts.

Macy's same-store sales fell 2% in the latest quarter while analysts polled by research firm Consensus Metrix had expected a 4.6% drop.

But Macy's stuck to its full-year forecasts and said its target of limiting the fall in comparable sales to 3-4% "feels achievable."

Macy's shares closed up 17% at $39.83. The percentage gain was its biggest intraday percentage gain in seven years.

17% rise on what? Closing stores? Falling sales? It is complete craziness. Yeah, closing under-performing stores can help a little, but it will not be enough to reverse falling sales. They should think more about what and to whom they are going to sell. imho, 17% rise is overdone. I am going to short the stock.