Macy’s and Walmart are both making significant moves in response to underperformance, with Macy’s announcing plans to close 150 stores by 2026 and Walmart deciding to shut down its West Covina store.
Macy’s fourth-quarter loss of $71 million, coupled with a slight dip in sales, prompted the company to implement a turnaround strategy dubbed “A Bold New Chapter.” This plan includes closing 150 stores and revamping the remaining 350, with a focus on attracting higher-end shoppers through initiatives like opening small-format Bloomingdale’s stores and luxury Bluemercury cosmetics locations.
While Macy’s hasn’t released a list of the 50 stores to close this year, the closure of the Union Square store in San Francisco is confirmed. However, Mayor London Breed assured that the store will remain open for the foreseeable future, as the sale of the property will take time. The city plans to work closely with Macy’s and potential new owners to ensure the iconic location continues to serve San Francisco.
While luxury brands have maintained their appeal, department stores have faced challenges as middle-class shoppers increasingly favor discount chains. Walmart’s decision to close its West Covina store on March 29 follows a thorough review process considering historical and current financial performance. There are no additional closures planned in the area.
All 237 employees at the West Covina store will have the option to transfer to nearby locations and will be paid through May 31, with eligible employees receiving severance thereafter. The store’s pharmacy will also cease operations, with staff assisting customers in transferring prescriptions to other Walmart locations.
The West Covina store, situated at 2753 E. Eastland Center Drive and opened in 2012, served as an anchor for the Eastland Center shopping plaza. Former West Covina Mayor Mike Touhey anticipated it would contribute $500,000 in annual sales tax revenue.
While the closure of Walmart’s West Covina store will impact the city’s sales tax revenue, it is not expected to significantly affect overall finances, accounting for approximately 1.5% of West Covina’s total sales tax revenue, according to Stephanie Sikkema, West Covina’s Finance Director. Sikkema emphasized the city’s resilience, stating that West Covina is diverse enough to withstand the closure.
Efforts are underway to find a new tenant for the space, with the city reaching out to the property owner to facilitate the process. Additionally, the city is providing support to affected employees through regional and state programs, offering assistance with tasks such as resume writing and applying for unemployment insurance.