Macy's takes the lead and finally starts addressing the overstored retail landscape. Macy's CEO Terry Lundgren showed up on "Squawk Box" to talk about his company's earnings this morning, and threw out one of the more interesting stats I've heard this month.
He noted that the United States has 7.3 square feet of retail space per person, while France and Japan both have 1.7 square feet, and the U.K. has 1.3 square feet.
The United States has almost five times more retail space per person than France, Japan and the U.K.? Yep. Terry rightly described the situation as "ridiculous."
Lundgren is addressing that by announcing Macy's will be closing 100 underperforming stores out of a base of 728. That is quite a reduction. The annual sales loss could approach $1 billion, but that might be offset somewhat by expense savings.
Other companies have also taken tentative steps to close stores. Gap, which has 3,200 stores, has also announced it will be closing stores.
There have been smaller closings of stores at Pier 1 Imports, Kohl's, and Office Depot, according to Ken Perkins at RetailMetrics, but now that Macy's has announced a big move you can bet others will.
Macy's is making that announcement because same-store sales continue to decline for all the major department stores:
Same store sales:
- Macy's: down 2 percent
- Kohl's: down 1.8 percent
- Kors: down 7.6 percent (5 percent expected)
- Fossil: down 3 percent
Investors seems to love the announcement, judging by the 13.5 percent gain in the company's stock.