Macy’s has faced persistent sales declines in recent years, prompting the retailer to launch an ambitious transformation plan aimed at regaining customer loyalty and achieving sustainable, profitable growth.

As part of this effort, the company has been consolidating operations by closing dozens of stores and laying off hundreds of corporate and retail employees.

With the holidays and seasonal sales fast approaching, i.e., the busiest time of year for the retail industry, most retailers are preparing by hiring seasonal workers to meet rising consumer demand.

Delivery expectations are also intensifying. Average parceldelivery times have accelerated by about 40%, dropping from 6.6 days in the first quarter of 2020 to 4.2 days in the second quarter of 2023, according to McKinsey & Company.

“Shifts in consumer preferences present an opportune moment for both shippers and providers to reassess their approaches,” noted McKinsey & Company. “Decisions regarding cost, speed, reliability, transparency, flexibility, and sustainability can all be reevaluated. Getting value propositions right will rely on understanding the priorities of specific customers, as there is no one-size-fits-all solution.”

Despite economic uncertainty, consumers plan to spend an average of $890.49 per person this year on gifts and other seasonal items, the second-highest amount on record, the National Retail Federation (NRF) reports.

“Time and again, Americans prioritize spending on loved ones for holidays despite economic uncertainty,” said NRF Vice President of Industry and Consumer Insights Katherine Cullen. “With more consumers planning to seek out sale events this year, retailers are prepared to deliver on deals and value to ensure consumers have everything they need to make the holiday special.”

Macy’s is closing its backstage operations unit at its distribution Center in South Windsor.

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Macy’s closes Backstage operations at its distribution center

While competitors continue to invest in supply chain efficiency and logistics, Macy’s has just made an unexpected move that may appear contradictory to this strategy.

The retailer is closing its Backstage operation unit at its distribution center in South Windsor, Connecticut, affecting 106 employees. The layoffs will begin on December 28 and continue through January 10, according to a Worker Adjustment and Retraining Notification Act (WARN) notice filed on October 28.

Jobs and number of employees affected

  • ARO Coordinator: 5
  • Asset Protection Officer: 1
  • Core Trainer: 5
  • Housekeeping: 1
  • ICQA Lead: 1
  • Operations Manager: 3
  • Power Equipment Operator: 8
  • Warehouse Associate: 77
  • Warehouse Lead: 4
  • Yard Driver: 1

The WARN notice also states that Macy’s will provide severance pay, benefits, and information on job opportunities at nearby facilities. The affected employees are not represented by a union and do not have bumping rights.

Macy’s Bold New Chapter strategy

The closures are part of Macy’s “Bold New Chapter” strategy, which focuses on streamlining operations and investing in its most profitable areas. Over the past decade, the company has shut down more than a third of its stores, a distribution center, and two third-party logistics facilities.

In early 2024, Macy’s revealed plans to shutter around 150 underperforming stores by 2026, including 66 closures this year alone. The retailer will concentrate on its remaining 350 stores, particularly its higher-end and more profitable brands, such as Bloomingdale’s and Bluemercury.

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As part of its reinvention, Macy’s has revamped 125 existing stores, enhanced product assortments, strengthened brand partnerships, and improved the in-store experience. The company is also reducing its footprint in traditional malls and plans to open 30 smaller-concept stores over the next two years to better align with evolving shopping habits among consumers. 

Macy’s opens its most advanced fulfillment center

While scaling back some operations, Macy’s is simultaneously investing in automation and modernizing its supply chain.

The company opened a 1.4 million-square-foot automated warehouse in China Grove, North Carolina, in late October, marking its largest and most technologically advanced facility to date. 

First announced in 2022, the center will handle nearly 30% of Macy’s digital supply chain volume, accelerating online order fulfillment, improving accuracy, and ensuring stores remain well-stocked to meet the growing demands of the retailer’s omnichannel business.

The company’s ultimate goal is to deliver online orders faster, in fewer shipments, and at a lower cost, all while boosting sales and reversing its 2.5% year-over-year decline in net sales as reported in the second quarter of 2025.

“As the Macy’s team prepares for the upcoming holiday season, their ‘reimagined stores’ are leading the way in driving outstanding customer experiences and providing value at scale. Getting the fundamentals right is only the start, and the hard work and determination will continue to reap benefits, as Macy’s returns to prominence in the department store sector,” wrote Kyndryl Strategy & Operations Leader Brandon Rael on LinkedIn.

Related: JCPenney borrows bold Macy’s strategy to boost holiday sales