Macy’s isn’t dying. In fact, it’s finally figured out how to stop the bleeding. For years, the narrative around the red star was one of inevitable decline, a slow-motion collapse of the American mall anchor. But the latest holiday numbers suggest that Tony Spring’s "Bold New Chapter" strategy isn't just corporate speak. It’s a blueprint that’s actually moving the needle.
The company just reported fourth-quarter 2025 net sales of $7.6 billion, beating its own guidance. More importantly, comparable sales across the entire Macy’s Inc. portfolio grew 1.8%. That might sound like a small number, but in the brutal world of department stores, it’s a massive win. While the headlines often focus on store closures, the real story is happening inside the stores that remain. Expanding on this idea, you can find more in: The Childcare Safety Myth and the Bureaucratic Death Spiral.
The Reimagine 125 Success Story
Macy’s is currently in the middle of a radical pruning. It’s closing 150 underperforming locations through 2026 to focus on a "go-forward" fleet of about 350 stores. The logic is simple: stop wasting money on zombie malls and pour every cent into the winners.
The results from the "Reimagine 125" group—stores that received specific upgrades in staffing, merchandising, and layout—are the proof of concept. These revamped locations saw comparable sales growth of 0.9% to 1.0% throughout 2025. When you compare that to the steep declines at the stores slated for closure, the contrast is stark. Experts at CNBC have also weighed in on this matter.
It turns out that if you actually put more sales associates on the floor and clean up the visual clutter, people might actually buy something. Macy’s is now expanding these initiatives to another 75 stores, creating a "Reimagine 200" cohort for 2026. This isn't just a fresh coat of paint. It’s a fundamental shift in how they allocate labor and inventory.
Luxury is Keeping the Lights On
While the namesake Macy’s brand is stabilizing, the real stars of the show are Bloomingdale’s and Bluemercury. These two nameplates are the engine room of the company’s profitability right now.
- Bloomingdale’s: The luxury chain just pulled off its best holiday performance on record. Comparable sales surged 9.9% in the fourth quarter. High-end shoppers haven't stopped spending; they’ve just become more selective. Bloomingdale’s is leaning into that by shifting from "aspirational" to "true luxury," focusing on exclusive merchandise and high-touch service.
- Bluemercury: The neighborhood beauty brand continues its winning streak, marking its 19th consecutive quarter of growth. With comparable sales up 1.3%, it’s a consistent cash cow that benefits from the "Lipstick Effect"—even when the economy feels shaky, people still want their high-end skincare and fragrances.
By diversifying across price points, Macy’s Inc. has built a hedge against economic volatility. When middle-class shoppers at Macy's pull back, the wealthy shoppers at "Bloomies" usually keep the momentum going.
Cutting the Dead Weight
You can't talk about the turnaround without talking about the closures. Macy’s closed 66 stores in 2025 and has already earmarked another 14 for the chopping block in 2026. Honestly, it’s about time. For a decade, the company sat on a massive real estate portfolio that didn't reflect modern shopping habits.
Closing these stores is painful for local communities, but it's vital for the company's survival. It frees up capital to invest in digital growth and small-format stores. These smaller "Bloomie’s" and "Macy’s" locations are often located in open-air shopping centers rather than traditional indoor malls. They’re cheaper to run, easier to shop, and have higher sales productivity per square foot.
Inventory and the Tariff Headache
One of the biggest wins for the management team this year was inventory control. They ended 2025 with $1.2 billion in cash and a very clean balance sheet. They didn't get stuck with a mountain of unsold holiday sweaters that they had to fire-sale in January.
However, it’s not all sunshine. Like every other major retailer, Macy’s is staring down a potential nightmare with tariffs. About 20% of their merchandise comes from China. While they’ve been diversifying their supply chain, a sudden spike in import costs could eat those thin margins alive. They’ve already seen a 50-basis-point hit to gross margins from previous tariff pressures.
To combat this, they’re leaning harder into private labels like "On 34th." Developing their own brands gives them more control over pricing and margins than they get with third-party brands like Nike or Ralph Lauren. It’s a defensive move that doubles as a brand-building exercise.
What This Means for Your Next Move
If you’re an investor or just someone watching the retail space, the takeaway is clear: Macy’s is no longer a "value play" waiting to go bust. It’s a company that has finally accepted its smaller, leaner reality.
The strategy is working because it’s realistic. They aren't trying to beat Amazon at the everything-store game. Instead, they’re focusing on "curation of choice"—being the place where you actually want to go to find a specific outfit or a new skincare routine.
Keep a close eye on the "Reimagine 200" rollout. If those next 75 stores show the same lift as the first 125, Macy’s will have officially proven that the department store model isn't dead—it just needed a serious haircut and a better attitude toward customer service. Check your local store's status; if it’s on the "go-forward" list, expect better staffing and exclusive brands the next time you walk through the doors.
