Macy’s Herald Square store is shown in Latest York City, August 21, 2023.
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Macy’s said Tuesday it is going to open 4 more stores that look so much different than its typical giant mall anchors because it tries to refresh a brand that has lost luster with many consumers.
And the struggling retailer thinks the format is working.
The brand new shops will open in the autumn in Boston, Las Vegas and San Diego and one other debuted this month in suburban Indiana. The locations might be smaller and situated in strip malls. They are going to host events and continuously swap out merchandise.
On a call with CNBC on Tuesday, CEO Jeff Gennette said Macy’s smaller stores outperformed the corporate in probably the most recent quarter. Those which were open for greater than a 12 months posted sales growth within the three-month period. Across the corporate overall, comparable sales on an owned-plus-licensed basis dropped 7.3%.
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The stores also outperformed the corporate during its holiday quarter, a key period for the retailer.
Macy’s already opened 10 similar stores to check the brand new concept. It unveiled the primary one within the Dallas-Fort Value area about three years ago. Some are called Market by Macy’s, a mini version of the Macy’s namesake stores, and others are named Bloomie’s, a smaller version of upscale department store, Bloomingdale’s.
The corporate has opened the stores to exchange a shuttered mall location, so as to add density to a market with high demand or in some cases, to enter a recent area like Seattle.
With the 4 recent locations, Macy’s will test a fresh approach: Calling them by just its name, Macy’s.
The off-mall shops are a method Macy’s is trying to handle an existential query — how it might refresh its fame and merchandise to appeal to younger shoppers, who might even see the 165-year-old department store only as a spot where their parents or grandparents would shop. Led by CEO Jeff Gennette, the retailer kicked off a three-year turnaround plan, called Polaris, that zeroed in on strategies including driving online growth and shuttering underperforming stores.
Two recent store concepts by Macy’s — Market by Macy’s and Bloomie’s
Melissa Repko | CNBC
A tricky consumer backdrop has complicated those turnaround plans. Macy’s on Tuesday beat fiscal second-quarter sales and earnings expectations, but stuck with a full-year forecast that calls for a pointy year-over-year sales decline. Its shares dropped 14% on Tuesday.
Together with the brand new stores, Macy’s is attempting to shake off its old-school fame in other ways. It launched a recent women’s apparel brand earlier this summer called On thirty fourth, a tribute to its Herald Square flagship location. It has given other private brands a makeover, including women’s brand, I.N.C.
The corporate plans to refresh or replace all of its existing private brands and introduce three more recent ones along with On thirty fourth through 2025.
