Macy's shares closed down 5 percent on Wednesday at $64.11. The chain also reported weak quarterly results, depressed by big discounts and a strong dollar that has discouraged tourists from spending foreign money in the U.S.
Macy's joint venture with Hong Kong-based Fung Retailing would invest $25 million over the coming 18 months. The venture has been in the works for more than a year, and Macy's will own 65 percent and expects about $50 million from sales in China in 2016.
Tmall will offer a limited array of products at first, including Macy's private brands and other popular luxury items. Alibaba is pleased with the deal as it seeks to expand its reach against its competitor, JD.com, for deals with U.S. brand owners.
Alibaba has received much more media attention than JD, and American consumers are much more likely to recognize the name.
As Macy's begins to shutter some of its stores, including five of its nine stories in Brooklyn, it will seek to continue selling products in markets around the world.