AuctionsMay 16, 2024
Christie’s Holds 2 Sales Despite CyberattackThough its website has been down for a week, Christie’s proceeded with its jewelry and watch auctions on May 13-14, bringing in nearly $80 million.
MajorsFeb 06, 2020
How Macy’s Plans to Save Itself
The retailer has a five-step plan, including closing 125 stores over the next three years and reducing its headcount by 2,000 employees.
Macy’s store in Herald Square. The retailer announced a turnaround plan, which includes shuttering 125 locations over the next three years.
New York—Macy’s Inc has announced plans to close 125 stores over the next three years and lay off 2,000 employees, as part of its new strategy to promote profitability and growth.
Dubbed “Polaris,” the three-year plan is expected to cost between $450 million to $490 million, most of which will be recorded in 2019.
It is estimated to save the company $1.5 billion and expected to be realized by the end of 2022.
“We will focus our resources on the healthy parts of our business, directly address the unhealthy parts of the business and explore new revenue streams,” said Jeff Gennette, chairman and chief executive officer of Macy’s, in a statement.
Macy’s detailed plan to reinvent itself encompasses store and office closures, a revamped merchandising strategy, an updated loyalty program, and a new store concept.
These are the five steps that may save the retail giant:
Strengthen Customer Relationships
The retailer said it will focus on building lifetime customer relationships via more personalization and an expanded loyalty program.
The next phase of its Star Rewards loyalty program, set to launch later this month, is expected to increase engagement from the occasional shopper and also invite new customers, said Macy’s.
Curate Quality Fashion
Macy’s is rethinking its merchandising strategy as it looks to be “the top destination for the best brands.”
The retailer is shifting its focus to its higher-margin private brands, setting a goal of building four $1 billion brands.
Accelerate Digital Growth
Macy’s will continue to grow its digital business, which it said rakes in more than $6 billion annually in sales, by investing in its website and mobile app.
Its website’s headquarters will relocate from San Francisco to New York City to be closer to its fashion brand partners.
The company will expand its presence in Atlanta, opening an office there and dubbing the city its primary technology hub.
Positions will also be added to its existing facility in Johns Creek, Georgia.
Optimize Store Portfolio
After evaluating its store portfolio, the retailer opted to close 125 stores over the next three years. Those stores account for $1.4 billion in annual sales, said Macy’s.
The company broke down its plan to improve its store portfolio into five additional subcategories: store closures and staffing, growth treatment, off-price expansion, new store format, and supply chain modernization.
For staffing, there will be staff reductions in some stores and increases in others. The company is cutting its workforce by 9 percent, or 2,000 corporate and support function positions.
The retailer is planning to upgrade 100 of its remaining stores, revamping the stores physically as well as updating merchandising strategies, technology, talent, and local marketing.
Macy’s said 150 stores have already been updated and that these stores outperform the others, accounting for 50 percent of 2019 total store sales.
Its off-price offerings will continue to expand, with plans to open 50 Backstage in-store locations and seven free-standing Backstage stores in 2020.
Macy’s described its off-price offerings, which include Backstage and Bloomingdale’s The Outlet, as “a highlight of the company’s performance.”
There’s also a new store format in the works called Market by Macy’s, an off-mall store that’s smaller than the average Macy’s.
The store will offer curated Macy’s merchandise alongside local goods, including food and beverages, as well as a community events calendar.
Macy’s began testing the idea in 2018, launching the service in 13 stores. The first official location will open in Dallas Thursday.
To modernize its supply chain, Macy’s plans to revamp its fulfillment network to boost inventory product productivity.
The retailer’s plan includes working toward increased sell throughs—the rate representing the amount of inventory a retailer receives from a supplier versus what gets sold—and lower markdown rates.
The company will use a new private brand sourcing strategy in an effort to reduce costs and improve speed.
Reset Cost Base
The reduction in employee headcount falls into this category, with plans announced to close offices around the country.
Macy’s offices in San Francisco, downtown Cincinnati and Lorain, Ohio will close.
Its customer contact center in Tempe, Arizona will also shutter, consolidating the operations to its centers in Mason, Ohio, which will increase its employee headcount, and Clearwater, Florida.
More employees will be hired at its Progress Place facility in Springdale, Ohio as well.
New York City will be the company’s sole corporate headquarters.
Changes are also coming to its senior management team.
John Harper, former chief stores officer, will take on the role of chief operations officer, taking on expanded responsibility for stores, technology, supply chain, and brand experience.
Filling Harper’s vacant seat as chief stores officer is Marc Mastronardi, former senior vice president of store operations and customer experience.
Danielle Kirgan, chief human resources officer, will add chief transformation officer to her current role, overseeing the company’s transition.
Looking Ahead
The retailer described 2020 as a “transition year,” expecting negative comps as a result of the business trajectory over the past six months, continued challenges in mall-based stores, and disruption as it implements its turnaround plan.
Net sales are expected to decline as a result of the store closures.
At the end of the plan, fiscal 2022, Macy’s may not be out of the danger zone.
Sales are expected to be within a range of $23.2 billion to $23.9 billion with same-store sales, accounting for owned plus licensed brands, down one percent to flat.
Editors' Picks
Sponsored by
More on Majors
The Latest
AuctionsMay 16, 2024
Sotheby’s Withdraws 101-Carat Yellow Diamond from AuctionDespite the absence of “The Allnatt,” Sotheby’s Geneva jewelry auction totaled $34 million, with 90 percent of lots sold.
ColumnistsMay 16, 2024
The PR Adviser: What the Designer Should’ve DoneLilian Raji gives advice to designers on how to make the most of great publicity opportunities.
Brought to you by
Record Gold Prices Have Consumers Undeterred. Here’s Why.Despite the rising prices, consumers continue to seek out the precious metal.
SourcingMay 16, 2024
Lucapa to Shed Stake in Lesotho Diamond Mine The mining company wants to divest its 70 percent holding in the Mothae Diamond Mine in an effort to streamline its portfolio.
Weekly QuizMay 16, 2024
This Week’s QuizTest your jewelry news knowledge by answering these seven questions.
ColumnistsMay 15, 2024
Squirrel Spotting: Why Retailers Struggle to Fire BrandsWhy do so many jewelers keep lines that are not selling? Peter Smith thinks the answer lies in these two behavioral principles.
AuctionsMay 15, 2024
Red Diamond Breaks Records at Phillips GenevaThe “Argyle Phoenix” sold for more than $4 million at the auction house’s second jewels sale.
Brought to you by
From Registration to Return: 10 Tips to Protect You Before, During and After a TradeshowTradeshow risks are real. Get tips to protect yourself before, during and after and gain safety and security awareness for your business.
Events & AwardsMay 15, 2024
See Who’s in JA’s 2024 ‘20 Under 40’ ClassThe annual list recognizes young professionals making an impact in jewelry retail.
IndependentsMay 15, 2024
David Mann Jewelers in Upstate NY to Close After 35 YearsOwner David Mann is heading into retirement.
FinancialsMay 15, 2024
Brilliant Earth’s Sales Fall Flat in Q1 While overall sales were sluggish, the retailer said its non-bridal fine jewelry was a popular choice for Valentine’s Day.
SourcingMay 14, 2024
Anglo American Confirms It Is Looking to Sell De Beers The mining giant also wants to offload its platinum business as part of an overhaul designed to “unlock significant value.”
AuctionsMay 14, 2024
2 Huge Yellow Diamonds Are Heading to AuctionChristie's is selling one of the diamonds, moving forward with its Geneva jewelry auction despite the cyberattack that took down its website.
GradingMay 14, 2024
Instappraise Adds Trifold Brochure to Appraisal OfferingsRetailers can customize and print the appraisal brochures from their store.
Lab-GrownMay 13, 2024
Lab-Grown Diamond Brand Lightbox Cuts Prices by 25 to 40%The move follows a price-drop test run in Q4 and comes with the addition of a “quality assurance card” from GIA for some loose diamonds.
TechnologyMay 13, 2024
Christie’s Website Brought Down by Hackers, Watch Auction Postponed The site has been down since Thursday evening, just ahead of its spring auctions.
AuctionsMay 13, 2024
Madeleine Albright’s Jewelry, Pins a White-Glove Sale at Freeman’s | HindmanThe late former U.S. Secretary’s collection went for quadruple the sale’s pre-sale estimate.
IndependentsMay 13, 2024
Zachary’s Jewelers Names Mother’s Day Jewelry Contest WinnersThree fifth graders’ winning designs were turned into custom jewelry pieces in time for Mother’s Day.
IndependentsMay 10, 2024
Frank Adams Jewelers Names New CEOKimberly Adams Russell is taking over the role from her father, David Adams, marking the third generation to hold the title.
CollectionsMay 10, 2024
Piece of the Week: Carina Hardy’s ‘Birth of Venus’ NecklaceAs a token of womanhood, this necklace depicts when Venus was born from the sea.
TrendsMay 09, 2024
Amanda’s Style File: Shine Bright, Moms Show your mother some love with a piece of fine jewelry.
IndependentsMay 09, 2024
Kyle Edward Fine Jewelry to Close Salisbury StoreThe company’s Easton location will remain open.
MajorsMay 09, 2024
JBT Elects New ChairmanBrian D. Fleming of Carla Corporation was elected to serve a one-year term in the role.
Supplier BulletinMay 08, 2024
Fusing Past and Present at the Las Vegas Antique Jewelry & Watch ShowSponsored by the Las Vegas Antique Jewelry and Watch Show
EditorsMay 07, 2024
Q&A: Author Vikki Tobak on the ‘Ice-Cold’ ExhibitionTobak, author of “Ice Cold: A Hip-Hop Jewelry History,” shares how the exhibition came to be, and the pieces people may be surprised to see.
EditorsMay 07, 2024
10 On-Theme Looks from the 2024 Met GalaStars adorned themselves in emeralds, platinum, and myriad bird motifs, writes Associate Editor Natalie Francisco.
IndependentsMay 07, 2024
112-Year-Old New Orleans Business Popping Up in Aspen M.S. Rau is set to open a seasonal gallery in the high-end resort town early next month.
