Macy's (M) announced on Tuesday that it would be closing 150 stores — about 30% of its locations. But the seemingly grim news has actually had a positive effect on the company's stock, at least in the immediate aftermath of the announcement.
A share of Macy's stock is up to $20.37 as of this writing — and was up to as much as $20.66 already today — an over 5% increase from when the stock opened at $19.40 per share. It closed at $19.30 yesterday.
Related: Stock Market Today: Stocks mixed; Macy's, Lowe's active; Bitcoin $57,000
Macy's labeled the stores that it is choosing to close as "unproductive locations," with the brand saying that those 150 stores accounted for just 10% of the company's revenue.
The news comes just a month after the company cut about 2,350 jobs — or about 3.5% of its employees.
It's also been a month since the news came out that Macy's rejected an offer worth $5.8 billion from investment firms Arkhouse Management and Brigade Capital Management to take over the company. The price would have bought the company at $21.00 per share, more than what the share price is currently despite the day's rise.
Related: More retailers are charging return fees: Here's why
But the positive stock market response today seems to be centered on the company's plan to shift its focus to its higher-end stores Bloomingdale's and Bluemercury. Under the new leadership of chief executive officer Tommy Spring, the company plans to add 15 Bloomingdale's stores and 30 Bluemercury stores and remodel several other stores. That's about a 25% increase in Bloomingdale's stores and nearly 20% for Bluemercury.
The company also plans to open smaller Bloomingdale's stores called Bloomie's in about 15 markets over the next three years.
Related: Veteran fund manager picks favorite stocks for 2024
