News Summary
Macy’s plans to close one-third of its department stores nationally, with the Downtown Crossing location in Boston at risk. Despite nationwide cutbacks, this store shows potential stability thanks to a data center above it. Its closure could harm local foot traffic and businesses, although analysts remain cautiously optimistic due to a favorable lease. Macy’s is strategically investing in key stores while planning to close underperforming locations, amid a shift towards higher-end brands.
Boston – Macy’s is in the process of closing one-third of its department stores nationwide as part of a consolidation strategy that is set to decrease its retail footprint by 150 locations by the end of next year. Among those at risk is the Macy’s store located at One Summer Street in Boston’s Downtown Crossing area, which has served as an essential retail anchor for the central business district.
Despite the ongoing closures, the Downtown Crossing Macy’s shows signs of potential stability. The property is distinctive because the building is owned by Markley, a data center developer that purchased it in the 1990s. This strategic acquisition has transformed the block’s focus from retail to technology, with the upper floors occupied by computer equipment crucial for the data center’s operations. This unique dual-use arrangement helps maintain the financial viability of the Macy’s store below it.
Losing the Downtown Crossing Macy’s would pose significant challenges for Boston, especially in light of the ongoing recovery from the COVID-19 pandemic. The presence of a major retailer like Macy’s plays a vital role in attracting foot traffic and supporting local businesses in the area. Furthermore, Macy’s does not own the block where its store operates, which raises questions about its long-term plans for the location amid nationwide store closures.
Markley has developed a colocation facility above Macy’s, allowing both operations to coexist successfully. They have secured favorable lease conditions that allow Macy’s to benefit financially from the arrangement. The data center serves high-profile clients in Boston, including W.B. Mason and Beth Israel Lahey Health, ensuring a steady income stream that may help offset expenses for the retail operation beneath.
Analysts remain cautiously optimistic about the Boston store’s future. While Macy’s announces plans to retain around 350 stores, which could include the Downtown Crossing location, experts believe it will only face closure if the company decides on a drastic reduction of its overall footprint. The Boston Macy’s has a long-term lease with low rent, making it economically practical to keep the store operational.
Moreover, it has been reported that the Downtown Crossing Macy’s is set to receive additional investment as part of Macy’s broader strategic shift. The company aims to invest in key stores while closing underperforming locations nationwide. Among the confirmed closures is Macy’s Kingston location in Massachusetts, which is slated to shut its doors in early 2025. The clearance sales for closing locations will begin in January 2025 and are expected to continue for eight to twelve weeks.
Macy’s strategy appears to focus on attracting wealthier shoppers by emphasizing higher-end brands in order to improve profitability. Recent earnings reports indicate the company has made $144 million in asset sale gains over the past year, attributed mainly to the ongoing store closures. Major cities across the nation, including Philadelphia and San Francisco, have already witnessed iconic department stores shutting down, which raises concerns about the sustainability of other locations still in operation.
The retail landscape is rapidly evolving, and while Macy’s continues to adapt to changing consumer spending trends, it remains a key player in an increasingly competitive environment. The outcome for the Downtown Crossing Macy’s will depend on its ability to leverage its advantageous position in a changing market and determine its role within the broader strategy of Macy’s as it attempts to reshape its retail presence across the country.
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Additional Resources
- Boston Globe: Macy’s Closing Stores in Downtown Boston
- Wikipedia: Macy’s
- Patriot Ledger: Macy’s Store Closing in Massachusetts
- Google Search: Macy’s Store Closures 2025
- WHDH: Macy’s Closing 66 Locations, Including One in Massachusetts
- Google Scholar: Macy’s Retail Strategy
- Boston Herald: Massachusetts Macy’s Store Shutting Down
- Encyclopedia Britannica: Retail
- WCVB: Macy’s Closing Store in Kingston, Massachusetts
- Google News: Macy’s Store Closures
