Macy's to open in-store Best Buy shops, close 35 to 40 stores

Macy's (NYSE:M) has partnered with Best Buy (NYSE:BBY) to open branded consumer electronics departments. The 10 shop-in-shops will open in Macy's stores by early November, in time for the holiday season. The department store chain also announced plans to close 35 to 40 underperforming stores.

The 300 sq. ft. Best Buy departments, staffed by Best Buy employees, will be placed in various Macy's throughout the United States. The space will sell Samsung smartphones, tablets and smart watches, as well as audio devices and accessories from other brands.

"We are delighted that consumer electronics will be returning to selected Macy's stores through this test, which will allow us to learn how we can best serve our customers' needs in this very sophisticated category," said Macy's President Jeff Gennette. "Our customers have expressed interest in electronics for self-purchase and gift-giving, and this collaboration with Best Buy reinforces Macy's as a shopping destination throughout the year for the products that are most in demand. We will test and learn, along with Best Buy, through the holidays and into 2016 before deciding on next steps."

In addition, the Macy's stores that will be closing represent only about 1 percent of the company's total sales, according to a company statement. Closures, scheduled for early 2016, are part of the retailer's plan to optimize an omnichannel strategy.

"Each year, we prune some stores that are our weakest performers so that we can concentrate our resources on the best locations and maintain a strong physical presence," said Terry Lundgren, Macy's chairman and CEO. "At the same time, we open a small number of new stores to fill gaps in our market coverage or where we have outstanding real estate opportunities." 

Lundgren said that Macy's has one of the largest and fastest growing digital platforms in the United States, which is integrated into physical stores for a complete omnichannel experience.

Today Macy's operates 770 stores. Over the past five years, 52 locations have closed, 12 new locations have opened, and six new Macy's Backstage locations are opening this fall.

For more:
-See this Macy's/Best Buy press release
-See this Macy's press release

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