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The leaders of Macy\u2019s Inc.<\/strong>\u2019s three<\/strong> retail banners \u2014 Macy\u2019s<\/strong>, Bloomingdale\u2019s<\/strong> and Bluemercury<\/strong> \u2014 took the stage together on Sunday, Jan. 13 at the NRF Big Show in NYC, offering a rare opportunity to hear from all three brands in unison, particularly as the company continues to face activist pressure.<\/p>\n Tony Spring, Chairman and CEO of Macy\u2019s Inc., Bloomingdale\u2019s CEO Olivier Bron and Bluemercury CEO Maly Berstein discussed their individual businesses, as well as the company\u2019s larger turnaround effort, currently underway.<\/p>\n Here are some of the big questions about the company\u2019s strategy and future that were answered:<\/p>\n The company\u2019s\u00a0Bold New Chapter turnaround strategy was first introduced in early 2024, around the same time that Spring was appointed Chairman and CEO. Spring described the plan as \u201can opportunity to reimagine the Macy\u2019s Inc. portfolio,\u201d<\/strong> and said he\u2019s pleased with the early results and plans to stay the course, despite some ongoing pushback from the shareholder peanut gallery. As the biggest indicator of the strategy\u2019s success, Spring pointed to comparable sales growth at the First 50 stores (the first 50<\/strong> Macy\u2019s<\/strong> stores slated by the company for improvements).<\/p>\n \u201cWe picked 50 stores and said, \u2018Let\u2019s focus on those 50 stores,\u2019\u201d Spring recounted. \u201cLet\u2019s up our game in terms of merchandise assortment<\/strong>. Let\u2019s change the presentation on the floor<\/strong> in terms of density of product. Let\u2019s put people back into the fitting rooms to make sure the service experience<\/strong> is better. We\u2019ve seen three<\/strong> consecutive quarters of improvement in our net promoter scores, in addition to three<\/strong> consecutive quarters of comp store sales growth [at these 50 stores].<\/p>\n \u201cWe\u2019re also trying to make sure that our operations are taking advantage of today\u2019s technology<\/strong>,\u201d Spring added. \u201cWhether that\u2019s the algorithmic side of where to fulfill products from so that we have fewer split shipments, or making sure that we are putting the right depth, size and color basis from a geography between digital and physical so that we don\u2019t take as many markdowns because we put the wrong product in the wrong place at the wrong time.\u201d<\/p>\n Similar rejuvenation efforts also are underway at Bloomingdale\u2019s<\/strong> and Bluemercury<\/strong>, both of which have entered this transition period on stronger footing than the company\u2019s nameplate banner. For example, Spring pointed out that Bluemercury has seen 15<\/strong> consecutive quarters of comp store sales growth, but that hasn\u2019t stopped the chain from launching a rebrand designed to \u201cclarify and reinforce\u201d its position in luxury beauty<\/strong>, said Berstein. Similarly, Bloomingdale\u2019s has its own \u201cDream Bigger\u201d transformation strategy <\/strong>underway that is focused on \u201cpushing the boundaries\u201d of customer and brand experience, according to Bron.<\/p>\n Most recently, Macy\u2019s has found itself being pushed to spin off its higher-performing business units (Bloomingdale\u2019s and\/or Bluemercury) by its latest activist investor because, as moderator Courtney Reagan of CNBC<\/em> put it, these brands\u2019 \u201cvalue is not being recognized in the share price.\u201d<\/strong><\/p>\n \u201cThe first part of your statement is right, we\u2019re not getting the recognition for the value of these two<\/strong> brands,\u201d said Spring in response, before again rejecting the idea of a spinoff. \u201cWe continue to believe that there are synergies that are leveraged between the three brands<\/strong>, between warehousing, legal, finance, back-end operations, joint brand negotiation,\u201d he said. \u201cThere\u2019s just so much opportunity for us to leverage the scale of the portfolio.\u201d<\/p>\n Without naming names, he then acknowledged recent moves by Macy\u2019s department store compatriots, which are facing similarly challenging market conditions \u2014 that is, the Nordstrom<\/strong> family striking a deal to take their namesake chain private, and Saks Global<\/strong> finally succeeding in acquiring fellow luxury chain Neiman Marcus<\/strong>.<\/p>\n \u201cIf you look at other companies deciding they don\u2019t want to be in the public market or they want to join together with others because they need to be bigger to be successful, we also need that strength of combined value,\u201d Spring said. \u201cBut we also will distinguish and make sure that neither of these brands becomes one another. The key is for the customer to find something special and different at Macy\u2019s, Bloomingdale\u2019s and Bluemercury. <\/strong>At the same time [we need] to continue to try to make the case to the public markets that this three-brand portfolio has more value than we are showing today<\/strong>.\u201d<\/p>\n In light of the recent Nordstrom deal, it\u2019s a fair question as to whether it would be easier to conduct the kind of transformation Macy\u2019s Inc. needs out of the public eye, but Spring quickly quashed that idea, saying \u201cI don\u2019t think that the choices are difficult. We have decided to close up to 150<\/strong> stores. We\u2019re going to close a number of stores this year; we announced 66<\/strong> earlier this week. We\u2019ve doubled down on Bloomingdale\u2019s and Bluemercury as growth engines as a part of our luxury sector. We\u2019ve decided our store experience can and should be better if we have a smaller portfolio within the Macy\u2019s brand. I don\u2019t think it\u2019s a question of public or private; it\u2019s a question of do we have a focused number of priorities?<\/strong>\u201d<\/p>\n Perhaps not surprisingly, both Spring and Bron\u2019s response to this idea was a firm \u201cno.\u201d<\/p>\n \u201cThe death of department stores has been going on since I was a child, and I\u2019m not that young anymore; that same death knell has been rung multiple times,\u201d said Spring. \u201c[Maybe you like] the name \u2018marketplace\u2019 better; maybe that helps people to reimagine the potential of a department store.<\/strong> If I told you we could be in any business we want to be, you\u2019d say that\u2019s a pretty exciting opportunity; you\u2019re not limited to just men\u2019s or women\u2019s or kids or home. If I said in either channel, physical or digital, we can expand or contract any business based on the opportunity that we see that season; if men\u2019s is a little softer and women\u2019s is doing well, we can fund into those things with more people, more advertising, more inventory.<\/p>\n \u201cThe key to remember is that the department store is essentially the curation of choice,\u201d<\/strong> Spring added. \u201cWe all love choice, and I think the department store is well positioned to offer that. And the three of us together, Bloomingdale\u2019s and Macy\u2019s with the specialty niche of Bluemercury, gives the consumer so many options, but done in a way that makes it easier to shop.\u201d<\/p>\n In particular at Bloomingdale\u2019s, Bron sees the department store as a chance to up the ante on what matters to today\u2019s luxury consumer \u2014 story, experience and service<\/strong>. \u201cThe store plays a very, very important role in our structure,\u201d he said. \u201cThis is where you\u2019re experiencing the brand. Our best marketing investment is actually investing in the store.\u201d<\/p>\n With the popularity, and acceptability, of counterfeits on the rise, fueled by social media \u201cdupe culture\u201d and the trend of quiet luxury, Reagan asked Bron how worried he was about this new threat to luxury. The short answer: not very.<\/p>\n \u201cWhat\u2019s the point of buying a $5,000, $6,000<\/strong> bag?\u201d he said. \u201cIt\u2019s not about a bag \u2014 it\u2019s about a story, an experience. <\/strong>When you buy a [luxury] bag, you buy a story, you buy a history, you buy a social marker. This relationship, this moment, is very, very special. There have always been threats to luxury, our job is to adapt and to find the best value proposition.\u201d<\/p>\n And as Spring pointed out, \u201cthere\u2019s a market for diamonds and lab-grown diamonds at the same time. I wouldn\u2019t call lab diamonds a dupe, but the fact is that they both use the word diamond, and there is a market for both.\u201d<\/p>\n Reagan also asked Spring how he is preparing for changes under the incoming Trump administration, which will take office later this month and has been promising big moves in international trade and immigration. Spring\u2019s response: \u201cThis isn\u2019t our first rodeo.\u201d<\/p>\n \u201cWe\u2019re paying attention to everything, and we\u2019re going to try to plan for the likely outcome<\/strong>,\u201d he said. \u201cWe\u2019ve all dealt with campaigns \u2014 [there\u2019s] rhetoric, and then there\u2019s policy. In 2016 and 2017 we had to do more diversification of our private brand development. We worked with all of our market partners to understand how they were thinking about production, and we\u2019re having those same conversations again.\u201d<\/p>\n<\/p><\/div>\n\n
How\u2019s the Turnaround Going?<\/strong><\/h2>\n
Should Macy\u2019s Inc. Spin off Bloomingdale\u2019s and\/or Bluemercury?<\/strong><\/h2>\n
Would it be Easier to be a Private Company?<\/strong><\/h2>\n
Is it Time to Give up on the Department Store?<\/strong><\/h2>\n
Does the Rise of \u2018Dupe Culture\u2019 Pose a Threat to Bloomingdale\u2019s and Luxury in General?<\/strong><\/h2>\n
Will the new Administration\u2019s Policies on Immigration and Tariffs Cause Problems?<\/strong><\/h2>\n