On Tuesday, Macy’s projected annual sales and profits below expectations, announcing plans to close approximately 150 stores by 2026 as part of a new strategy to achieve $100 million in cost savings this year.

Despite the lower-than-anticipated forecast, Macy’s shares saw a 7% increase as the department store chain surpassed quarterly profit estimates.

However, its performance has trailed behind competitors in 2023, with a 3% decline compared to the 13% surge observed in rivals Nordstrom and Kohl’s.

These stores slated for closure represent less than 10% of Macy’s annual sales and are primarily underperforming mall-based locations, clarified CFO Adrian Mitchell in statements to Reuters.

The closures will not result in additional layoffs.

Facing sluggish sales, Macy’s has drawn the attention of activist shareholders and potential bidders, Reuters reported.

It is also confronting a proxy battle initiated by Arkhouse Management, which nominated nine candidates to its board.

This new plan supplements Macy’s decision in January to shutter five stores and reduce its workforce by 2,350 jobs, constituting 3.5% of its overall staff. As of the end of the fourth quarter, the retailer operated in 718 locations.

Written by B.C. Begley