Macy's to close up to 40 stores

Macy's will close 35 to 40 underperforming stores, around 5% of its total locations, the department store chain announced Tuesday.

The stores, slated to be shuttered in early 2016, will be identified at a later date, said the company with corporate offices in Cincinnati and New York.

Annual sales volume at the stores, "net of sales expected to be retained in nearby stores and online," as the company puts it in a statement, is expected to be about $300 million. That would represent about 1 percent of total Macy's sales, the company said.

The closures are a bold move: Macy's has closed a net total of 40 stores over the past five years. CEO Terry Lundgren said the retailer will remain a major store operator, but noted the change comes as shoppers alter their habits, buying more merchandise online.

There are now 770 Macy's stores in 45 states. Over the past five years, 52 stores have been closed and 12 new ones opened, the company (ticker M) said.

Lundgren called brick-and-mortar stores "absolutely vital" to the brand.

"As new shopping centers are opened, however," he said in a statement, "many customers change their shopping habits and often the sales volume of a store gets divided among the new and nearby, existing centers. 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."

At the same time the company opens a "small number" of new stores "to fill gaps in our market coverage or where we have outstanding real estate opportunities," he said.

Macy's stock has been hit hard after a month of marlket volatility, with shares down a bruising 20% from the all-time high it hit in mid-July. The tumble snaps an almost seven-year winning streak as the retailer deftly navigated the Great Recession and its lingering aftermath that dragged down so many competitors.