HONOLULU (HawaiiNewsNow) - Macys is the largest remaining department store chain in America. Montgomery Ward crawled back into its mail order catalog where it came from. Sears and JCPenney, same company, are struggling. Now Macy's plans to close another 100 stores.
A statement by a Macy's executive is worth noting: "Some of our stores are now more valuable as real estate."
In other words, it's not just whether a store has customers, but what's it worth as property? In the 1990's, railroads suddenly realized their giant switching yards in major urban areas sat on land that was really valuable if turned into malls and high-rise condos. So they moved their switching to cheap land farther away, and sold to developers. This is fine apart from one thing.
Companies are supposed to stick to what they know. Diversification is undertaken carefully. Retailers don't know any more about real estate than railroads do. Do this if you feel you have to, but don't take your eye off the ball.