Macy’s expands AI inventory tool to target $235 million savings by 2026

Macy’s said it will use AI to better manage its inventory after deciding to scale a pilot project that may help reach its goal of generating $235 million in savings by the end of the year. The company expects to realize supply chain efficiencies in the second half of 2026, which should benefit gross margins.

Macy’s is adding an AI forecast overlay capability to its replenishment system, moving the tool from a pilot to broader execution. As of August, the retailer reported operating 661 stores, including the Bloomingdale’s and Bluemercury banners. In October 2025, Macy’s opened a 2.5‑million‑square‑foot fulfillment center in China Grove, North Carolina, featuring high‑performance automation.

“We are adding an AI forecast overlay capability to replenishment, moving from pilot to broader execution to improve in stocks and deploy our inventory more efficiently,” Tom Edwards, chief operating officer and chief financial officer at Macy’s said.

The company announced its “Bold New Chapter” initiative in 2024, aiming to save roughly $235 million in supply‑chain related costs by the end of 2026. As part of that plan, Macy’s said it would close approximately 150 underproductive locations over the period and has laid off roughly 1,000 workers since the start of the year. These steps accompany earlier investments such as the October 2025 opening of a 2.5‑million‑square‑foot fulfillment center in China Grove, N.C.

What we know

Macy’s aims to save roughly $235 million in supply-chain related costs by the end of 2026
The company expects to realize supply chain efficiencies in the second half of 2026, which will benefit gross margins
As of August, Macy’s reported it has a total of 661 stores
In October 2025, Macy’s opened its 2.5-million-square-foot fulfillment center in China Grove, N.C.
Tom Edwards is chief operating officer and chief financial officer at Macy’s