Macy’s CFO thinks off-price concept will attract new customers
A major concern when any retailer launches an off-price concept is to avoid creating a new competitor that pulls sales away from its core business. Since Macy’s revealed that the company is working on launching an off-price concept, many have wondered how the chain will navigate that particular conundrum.
On the company’s fourth quarter earnings call, CFO Karen Hoguet expressed confidence in Macy’s ability to attract new shoppers with the as yet unnamed off-price model based on the experience that Bloomingdale’s had with its outlet business, which has brought new customers to the core brand.
While Bloomie’s is operating outlets, Ms. Hoguet said Macy’s new concept will be more like a traditional off-price store. She mentioned Macy’s marketing prowess, private brands and relationships with vendors as key strengths that will help it succeed against tough competition.
While acknowledging the challenge of entering a market that includes Marshalls, Nordstrom Rack, T.J. Maxx and others, Ms. Hoguet expressed confidence in the team led by Peter Sachse, Macy’s chief stores officer, that is responsible for the development of the off-price store.
"Our team thinks they have the opportunity to compete quite effectively against these players," said Ms. Hoguet (via SeekingAlpha). "Obviously, I’m not going to tell you until we started rolling that. But the team feels very optimistic that we will do well, but again this is one of those ends we will let the customer vote and see what she says."
- Macy’s Management Karen Hoguet on Q4 2014 Results (Earnings Call Transcript) – SeekingAlpha (reg. required)
- Macy’s off-price chain to be more like T.J Maxx than Nordstrom Rack – Fortune
- Macy’s restructutre plans bring news of possible off-price chain – RetailWire
How would a Macy’s off-price store look if you were responsible for its creation? What factors will be most critical to the ultimate success or failure of a Macy’s off-price format?