Macy's’ Post

Stepping into the role as Macy's Chief Executive, Tony Spring faces dual challenges: rejuvenating stores and fending off a potential takeover bid from investors. With Bloomingdale's as his background, Spring aims to infuse innovation into Macy's amid shifting consumer trends and digital retail dynamics. The proposed $5.8 billion buyout bid by Arkhouse Management and Brigade Capital Management only intensifies the scrutiny on Spring's leadership. Macy's, with its diverse customer base, must differentiate itself by attracting younger shoppers, especially Gen Z. The threat of activist investors eyeing Macy's real estate assets complicates Spring's agenda, necessitating a holistic strategy beyond traditional cost-cutting measures. As Spring navigates Macy's transformation, stakeholders eagerly await its outcome, underscoring the importance of innovative solutions in today's retail landscape. #RetailLeadership #BusinessTransformation #MacysCEO #RetailInnovation #amsterdamassociates

Macy's Announces Strategic Shifts for Future Growth: Macy's recently unveiled their full-year 2023 results and outlined key strategies for future growth. Here some points that caught my attention: >>Optimizing store footprint: The company plans to close 150 underperforming stores by 2026, while simultaneously increasing the number of smaller format stores. This shift suggests a focus on right-sizing their physical presence and aligning with evolving customer preferences. >>Elevating luxury experience: They aim to grow luxury store locations by approximately 20%, focusing on brands like Bloomies and Bluemercury. This indicates a strategic move to cater to a higher-end clientele and potentially increase profit margins. >>Curating a selective assortment: plan to adopt a more curated approach to their merchandise, offering a smaller selection with potentially higher margins and improved profitability. This suggests a shift towards a more focused and strategic product selection. We can expect Macy's to move towards smaller store formats, offer a more selective and potentially higher-end product range, and prioritize their luxury brands.. Let's hear your thoughts on this aggressive strategy... #Retail #luxurygoods #merchandise

Macy’s Consistent Profits Have Faded & The Iconic Department Store Is Betting On Itself. Last week, Macy’s walked away from deal talks with two #investors, leaving the iconic American department store to tackle the challenging #retail landscape alone. The deal, which would have valued the #Macys enterprise at some $9B, was squashed after Macy’s board had concerns that the #financing for the proposed deal wasn’t solid enough, sending shares in the company down more than 14% since the deal was called off one week ago. The buyout saga, which began in December, saw the bid raised twice before ultimately being abandoned. But, the potential buyers weren’t reportedly interested in “Macy’s: The Enterprise” so much as they wanted “Macy’s: The Real Estate Portfolio”. The company's #property portfolio is estimated to be worth anywhere from $5B to as much as $14B. Despite bouncing back relatively strongly from COVID-19, Macy’s once-reliable #profits have all but dried up: in the last 12 months the company has reported $13 M in net #income — a figure that was routinely over $1B in prior years. By ending talks, Macy’s execs are signaling that they will forge ahead with its #turnaround plan. That’s a bold move considering that peers such as #JCPenney and #Sears have succumbed to #bankruptcy, E-commerce continues to grow, and inflation-weary consumers are showing signs of weakness. The strategy is focused on doubling down on its top 50 outlets, closing underperforming stores, and adding new #Bloomingdales and #Bluemercury locations. Macy's is preparing to celebrate the centenary of its #Thanksgiving Day Paradethis year... its next 100 years might require some reinvention. [email protected] 818-914-9271 #tradecreditinsurance

Macy’s to close 150 more stores in 3 years   As part of a transformation plan unveiled Tuesday, Macy’s said it will shutter 150 underperforming locations over the next three years, with 50 closing this year alone. At the same time, Macy’s Inc. will open 15 Bloomingdale’s stores, at least 30 Bluemercury stores and 30 small-format, off-mall stores.   The decision by Macy's to close 150 stores, even those that are currently profitable, marks a bold and potentially transformative strategy in the face of the retail sector's rapid evolution. From a business perspective, this approach reflects an understanding that long-term success requires more than immediate cash flow—it demands a sustainable model that aligns with shifting consumer preferences and the digital marketplace.    It seems that by reallocating resources to expand smaller formats and invest in luxury and beauty segments, Macy's is aiming to position itself more strategically in the market. Such moves, while ambitious, could pave the way for renewed growth and relevance in a highly competitive landscape. For businesses observing these changes, the lesson is clear: adaptability, informed by a deep understanding of market trends and consumer behavior, could be the key to success.   https://lnkd.in/eM4495_8   #PaletzAdvisor #stratgy #mentorship #enrtrepreneurship

Macy’s Inc. has a new turnaround strategy that excited Wall Street, but the department store is recycling an old turnaround strategy that smacks of desperation to keep the idea of the American middle class — and upward mobility — alive, writes Leticia Miranda for Bloomberg Opinion. Over the last half a century, the middle class has tumbled and taken Macy’s down with it. Decades of fiscal policy, recessions and inflation all combined to hollow out middle America. Middle-class incomes have grown at a slower pace than higher-income households, resulting in a wider wealth gap. At the same time, consumer trends splintered along economic lines. Pinched shoppers shifted their spending to off-price stores such as T.J. Maxx, while well-off ones went higher up the value chain toward luxury brands.  #retail #shopping #middleclass #money #economy https://lnkd.in/dNJK25ER

Macy's Inc. announced plans to close 150 of its less productive stores over the next three years, which is about one-third of its Macy's locations in the U.S. This move is part of a strategy to fend off acquisition attempts by activist firms Arkhouse Management and Brigade Capital Management. The closures aim to consolidate Macy's presence, possibly allowing employees from closed stores to transfer to nearby locations. Additionally, Macy's plans to open 15 new Bloomingdale’s and 30 Bluemercury locations by 2026 to focus on growth in its higher-end brands. This announcement was made alongside Macy's fourth-quarter results and follows a rejected $5.8 billion buyout offer. The new real estate strategy, unveiled early in CEO Tony Spring’s tenure, is expected to release $600 million to $750 million in assets by 2026. Despite beating fourth-quarter earnings estimates, Macy's forecasted full-year earnings and net sales below analyst expectations, describing 2024 as a year of transition and investment. Macy’s reported a decline in same-store sales across its brands, with the Macy’s namesake brand and Bloomingdale’s experiencing drops, while Bluemercury saw a slight increase. The company's long-term strategy includes adapting to changing consumer preferences for online and off-mall shopping, building on its earlier Polaris strategy aimed at closing 125 stores to stabilize profitability. Macy's emphasizes reallocating resources to its remaining stores and expanding small-format, off-mall locations, highlighting the significant role of real estate in its business model. #Macys #RetailTransformation #StoreClosures #RealEstateStrategy #Bloomingdales #Bluemercury #RetailIndustry #ConsumerTrends #PolarisStrategy #CorporateStrategy

The gradual demise of America’s department stores is not just history. It’s a lesson. Macy’s announcement that it’ll close 150 stores—nearly 30% of its total—is the result of a once-great industry in decades of decline. It comes as no big surprise. Their downturn can be blamed on many factors: competition from big box retailers, a shift to online shopping, activist shareholders fighting for control of the company’s board. But the key problem for Macy’s and others is more fundamental: they failed to evolve. While you can make money off a declining business model for years, data shows that once a company runs up against a major stall in its growth, it has less than a 10% chance of ever fully recovering. (See comment for link to research.) Department stores were once the giants of American retail. They reshaped how and where we bought everything, from clothing to appliances to toys to electronics. No longer. This is a wake-up call to those making money off a declining business model. It should push you to deeply rethink how you operate. And to reimagine how you create, distribute and capture value—not only to thrive but to address the transformational challenges of the coming decades. How are you anticipating what’s next and having the flexibility to evolve? #futuresthinking #foresight #innovation #strategy #growth

This year has been one of change for department stores. New leaders have started at several chains. There are takeover and merger attempts in the offing. And we have heard a lot about step changes in the way operations are managed. While the word renaissance is far too strong, there has been hope that department stores can finally stem the long run of decline. Sadly, the results from the second quarter are not positive. Most of the main chains are still in decline and there is simply no real growth on the board. Sure, there are some crumbs of comfort. Sales at Nordstrom have now stabilized. The first fifty stores Macy’s has revitalized saw sales grow by 0.8%. And Bloomingdale’s, which is exposed to a soft luxury market, has performed admirably. But none of these things really change the trajectory. For the chains shown below, collective second quarter sales are down by 8.8% since the same period in 2019. That’s a reduction of $1.21 billion in revenue. And this has been delivered during a time when the consumer economy has been on fire. While changes are coming through and efforts are genuinely being made at some chains, these things will take quite some time to produce overall better numbers. And they will, at least in the immediate term, be offset by structural shifts as department stores continue to close stores to meet new levels of demand. The decline is not yet over. The very modest hope is that it will reach a plateau in the next few years. ___ For reference, here are the Q2 2019 v Q2 2024 sales changes: * Kohl's: -15.4% * Macy's: -11.0% * Nordstrom: -0.6% * Dillard's: +4.4% #retail #retailnews #departmentstores #economy #spending

Crumbs of comfort… many department stores are stuck in this comfort zone of doing things in the same way and expecting better results. Processes must be innovated. Experiences must be excellent. Customer service must be out of this world. Staying in the comfort zone will not increase profits. As Neil says… the decline is not over yet. #retail #TRE #departmentstores #stores #merchandising

With the big announcement of the Saks takeover of Neiman Marcus, news that activist investors have upped their bid for Macy's flew under the radar. This week, Arkhouse and Brigade Capital Management increased their offer by around $300 million. This values the stock they don’t already own at $6.9 billion. Putting more money on the table automatically makes the bid more attractive. However, it does not necessarily make it right for the long-term health of Macy’s. Arkhouse and Brigade are focused on real estate. They want to monetize Macy’s property to generate a return. This essentially means selling off stores and then charging Macy’s rent on the shops it continues to operate. We have seen this story play out many times before, and it rarely ends happily for retailers or brands. Take Red Lobster as the latest example. After being bought by private equity, a sale of real estate generated $1.5 billion; but it ended up costing the chain $200 million a year in rent – effectively pushing it into bankruptcy. The tragedy of all this is that it comes just as Macy’s, for the first time in a long time, has recognized the problems in its retail operation and is working to remedy them. CEO Tony Spring has set out a plan for renewal and is executing with speed. There is still a lot to do, but in my view that strategy should be given the time and chance to succeed. At the end of the day, Macy’s can be run as a retailer and built up. Or it can be used as an ATM to generate some short-term cash and torn down. Only one of these paths leads Macy’s into the future.  #retail #retailnews #departmentstores #corporatedeals #realestate