Macy’s is pushing forward with new store formats as it seeks to turn around its fortunes following a disappointing quarter. The department store retailer reported an 8.2% comparable sales decline for Q2 2023, but President and CEO-Elect Tom Spring noted on a call with investors that its alternate formats, such as Market by Macy’s and Bloomie’s, saw positive comparable sales growth during the same period.
The retailer is now planning to open four additional small-format stores across the country, including the first in the Northeast and West, with locations slated for Boston, Las Vegas, San Diego, and Highland, Indiana. The new stores will have the smaller, curated selection of a Market by Macy’s location but will bear the standard Macy’s banner. The stores will host local events, create pop-up shops for local businesses, and offer access to all the services expected of a full-size store, such as the At Your Service desk, which offers assistance with bill payments, returns, exchanges, and other tasks.
Macy’s first launched its small-format stores in 2020, and it has opened eight to date. The Market by Macy’s locations are found in off-mall shopping centers and have footprints between 30,000 and 50,000 square feet. They are designed with modern shopping habits in mind, with features like larger fitting rooms with lounge areas and full-length mirrors to enable “selfie moments” as well as “styling carts” with on-trend product selections that help shoppers explore the latest looks.
The new shop launches are part of Macy’s Polaris strategy, which was announced in 2020 and seeks to modernize the venerable retailer through five initiatives, including optimizing the store portfolio. The smaller, off-mall locations are based on the original Market @ Macy’s concept, a store-in-a-store pop-up that featured new and emerging brands. Participating brands gained insight into how shoppers interact with their products in the store.
The smaller-format Macy’s and Bloomingdale’s similar off-mall concept Bloomie’s have since become the wave of the future for Macy’s. Modern shoppers aren’t interested in department stores when they can find an even bigger selection on Amazon, so smaller, more intimate experiences are proving more appealing — and Macy’s is embracing this transformation wholeheartedly.
“The hope is that we’re going to have a model that we’re going to be able to scale more aggressively in 2024 and beyond,” said CEO Jeff Gennette in a March 2023 interview with CNBC. “We’re very bullish on the concept. We’re very bullish on the early learnings. The size, the locations are all working.”
While Macy’s has yet to release specific details about its small-format stores, the retailer’s faith in these concepts is a sign that they are working. Macy’s may be struggling, but rival department store Sears has dwindled to a dozen stores. The enormous mall anchor may be a relic of the past, and Macy’s looks ready to embrace the future.