DISCUSSION
Does Macy’s incoming CEO have a plan to turn the business around?
Written by George Anderson
Photo: RetailWire
Last June, Macy’s, Inc. announced that it was beginning a transition that would see Jeff Genette, the company’s president, take over as CEO from Terry Lundgren. With about a week to go before he formally becomes CEO, Mr. Genette seems set on sticking to elements of the plan that he laid out last year, such as the deployment of brand-licensed store-within-a-store concepts, while offering a few new ideas, as well.
Speaking at the Bank of America Merrill Lynch Consumer & Retail Technology Conference yesterday, Mr. Gennette discussed test projects that may eventually be rolled out across the chain’s stores nationwide.
Among these are plans to refine Macy’s couponing tactics. Mr. Gennette, CNBC reports, likes the discounts that come with coupons, but does not like small print exclusions. The chain is shifting its strategy to offer a dollar discount based on the overall purchase rather than assigning discounts to specific brands or SKUs.
The chain is also looking at a move to a more self-service model. Macy’s is currently testing letting customers in shoe departments serve themselves by grabbing boxes they need on the sales floor rather than waiting for an associated to retrieve them from the backroom.
Macy’s, in an effort to ward off share loss to off-price chains, is also dedicating an area of the store, dubbed "Last Act," for clearance merchandise. Mr. Genette said the section helps the store maintain margins by removing older merchandise from its current merchandise racks. The chain plans to add Last Act departments to 30 stores this year.
Macy's also plans to emphasize beauty in its stores by expanding the footprint dedicated to its Bluemercury brand along with dedicating sections to its private label lines.
Speculation has arisen lately that Macy’s may be on the block. According to reports, the company has had talks with Hudson’s Bay Company, which owns Lord & Taylor, Saks Fifth Avenue and its namesake chain, about a possible sale. The deal, however, appears to have been scuttled due to Hudson’s Bay inability to secure adequate financing. Reports have since emerged that Hudson’s Bay is in talks to acquire Neiman Marcus.
Macy’s, which saw same-store sales decrease 2.1 percent during the holiday season, announced last month that it would close 68 stores and cut roughly 10,000 jobs.