Do Specialty Shops Make Sense Inside Macy’s?
Department stores have always been known for their mighty merchants. But Macy’s, the largest operator, has lately been getting help from some specialists inside the mall.
In early August, Lids, the retailer of caps and apparel for sports fans, reached an agreement to open licensed team merchandise departments in Macy’s stores and online under the name of Locker Room by Lids. The departments, located in about 150 markets covering major professional sports teams and colleges, will be operated by Lids. Lids will become the exclusive operator of Macy’s in-store team sportswear
The arrangement follows up on the agreement last fall to have Finish Line, the athletic footwear retailer, open Finish Line-branded athletic footwear shops in Macy’s stores and on macys.com. Over 450 locations will be directly operated by Finish Line as leased departments. For the remaining approximately 225 Macy’s stores that carry footwear, Finish Line began managing the athletic footwear assortment and inventory in Spring 2013, without the staffing or branding provided in the leased departments.
For Finish Line and Lids, both gain greater access to the female customer who doesn’t actively shop their stores inside the mall. In both cases, Macy’s gains greater buying clout inside the athletic space as well as selling knowhow for categories traditionally catering to young men.
Macy’s also has similar leased in-store shops with Sunglass Hut for sunglasses, Motherhood Maternity for maternity apparel, and Starbucks for coffee. Last holiday season, Toys "R" Us opened temporary shops inside 24 primary Macy’s stores. Other department stores similarly leasing space include J.C. Penney with Sephora and Joe Fresh as well as Nordstrom with Topshop.
- Macy’s and Lids Sports Group Partner to Open Licensed Team Sportswear Departments in Macy’s Stores and Online – Macy’s
- Finish Line to Become Exclusive Partner of Athletic Shoes for Macy’s, Both In-Store and Online – Macy’s
- Macy’s and Luxottica: exclusive agreement to open additional Sunglass Hut points of sale in about 430 Macy’s department stores in the U.S. – Luxottica
- Motherhood Maternity and A Pea in the Pod branded maternity apparel will be available in over 615 Macy’s locations by the end of February 2011 – Motherhood Maternity
- Macy’s And Toys"R"Us Partner To Provide Toy Departments In Select Macy’s Locations During 2012 Holiday Selling Season – Toys "R" Us
Overall, what are the pros and cons for department stores of leasing space to inside-the-mall specialty stores? How do you see this affecting the department store’s operation and overall performance?