Macy’s has announced plans to close 150 “underproductive” stores – more than a fifth of its department store empire – over the next three years.

The business said it would shutter about 50 outlets by the end of 2024 after issuing a muted trading outlook for the year ahead.

As part of what it calls a “bold new chapter”, the retailer – which in January announced plans to cut 2,350 jobs, or 3.5% of its workforce – said it would concentrate more on luxury shopping.

As part of this focus, Macy’s plans to open 15 of its higher-end Bloomingdale’s stores, and 30 Blue Mercury cosmetics locations.

“A bold new chapter serves as a strong call to action,” Tony Spring, the new chief executive officer of Macy’s, said. “It challenges the status quo to create a more modern Macy’s, Inc.

“We are making the necessary moves to reinvigorate relationships with our customers through improved shopping experiences, relevant assortments and compelling value.”

Alongside the closures, Macy’s pledged to prioritize investment in about 350 locations, and expand smaller stores.

Employees at Macy’s are “energized by the work ahead”, Spring claimed, “as we accelerate our path to market share gains, sustainable, profitable growth and value creation for our shareholders”.

Shares in Macy’s dropped 1.4% during pre-market trading on Wall Street. Last month, the retailer rejected a $5.8bn takeover offer from the hedge fund Arkhouse Management and Brigade Capital Management, an investment manager.

Even before the pandemic, department stores were facing intense competition from online rivals. Neiman Marcus and JCPenney both filed for Chapter 11 bankruptcy protection.

Macy’s posted a net loss of $71m for the last quarter of 2023, down from profits of $508m in the same period of 2022. Sales dropped 1.7%, to $8.12bn, which was slightly higher than Wall Street analysts had expected.

The Associated Press contributed reporting