Dive Brief:
- Macy’s will open a distribution center in China Grove, North Carolina, in mid-2025, CEO Tony Spring said during a March 6 earnings call.
- The 1.4 million-square-foot facility will offer automated, direct-to-consumer inventory fulfillment and management across its nameplates, including Macy’s, Bloomingdale’s and Bluemercury.
- Once fully operational, the new China Grove facility is expected to account for nearly 30% of Macy’s digital supply chain capacity, serving locations nationwide, as stated in the initial 2022 press release.
Dive Insight:
As part of its “Bold New Chapter” transformation plan, Macy’s has been trying to right-size its supply chain network to save an estimated $235 million by 2026. In addition to closing 150 stores by next year, the retailer hopes that shuttering distribution centers, increasing automation and improving inventory will help it return to profitable growth.
“We're simplifying our business. We're adding in automation. We're eliminating unnecessary work — just a number of things to really make sure that we're continuing to be very disciplined on SG&A,” Mitchell said.
As Macy’s turnaround efforts continue, the retailer expects that the $548 million China Grove facility addition will create greater supply chain efficiencies at a lower cost, Spring said.
To further accelerate the speed of Macy’s supply chain, in 2025 the company plans to scale hold-and-flow capabilities to better allocate supply to demand at store locations, Mitchell said.
“We have worked hard to create a flexible supply chain that allows us to mitigate the impact from potential disruptions to global trade and tariff activity,” Mitchell said.
Day-to-day changes in tariffs and lower consumer spending has forged an environment with “some knowns and many unknowns,” said Adrian Mitchell, CFO and COO.
However, Spring expects no Q1 impact to inventories, and the company is working with its partners to gain visibility into the dynamic situation.
“As we look at the remainder of the year, we're taking a case-by-case basis and trying to react in real time as we learn more,” Spring said.
