The nation's #1 department store chain has adopted the name of its most famous brand and cash cow: Macy's. Macy's, Inc. operates about 840 stores in 45 states, the District of Columbia, Guam, and Puerto Rico under the Macy's and Bloomingdale's banners that ring up some $26 billion in annual sales. The stores sell men's, women's, and children's apparel and accessories, cosmetics, and home furnishings, among other things. It also operates macys.com and bloomingdales.com. Macy's flagship store in Manhattan's Herald Square is the world's largest. The Macy's Thanksgiving Day Parade, started in 1924, is an annual rite. Macy's (formerly Federated Department Stores) began as a dry goods store more than 150 years ago.
Main chain Macy's and Bloomingdale's, its up-scale subsidiary, are American retail institutions with the company and its predecessors operating department stores since 1830. More recently, Bloomingdale's began opening outlet stores in 2010. With seven in operation at the end of fiscal 2012 (ends January) and five more planned for fiscal 2013, Bloomingdale's Outlets are a focus for growth at the company. Both chains have online incarnations (macys.com, bloomingdales.com).
Macy's rings up 100% of its sales in the US. (The Al Tayer Group operates a Macy's store in Dubai.) In 2009 Macy's adopted a new corporate structure with 69 geographic districts grouped into eight regions (based in the Chicago, Houston, Miami, Los Angeles, New York, Pittsburgh, San Francisco, and Washington, DC areas).
The road to success has been a bumpy one for Macy's since its purchase of May Department Stores. Sales began falling five years ago, prior to the onset of the deep recession and retail slump in the US, which made matters worse. However, Macy's appears to have weathered the storm and emerged as a healthier company. In fiscal 2012 (ends January) sales grew by more than 5% vs. the prior year, after posting about a 6% increase in the previous annual comparison. Same-store sales at Macy's stores increased 5.3% and 4.6% in fiscal 2012 and 2011, respectively. Still the $26.4 billion in sales Macy's rang up in fiscal 2012 is below the nearly $30 billion it took in in fiscal 2007. Profits have increased as well, with Macy's posting a 48% increase in net income in 2012. The retailer's My Macy's initiative has received much of the credit for Macy's revival, although the improvement in the US economy has helped.
Under the leadership of its charismatic chairman and CEO Terry Lundgren, Macy's has fought hard to reinvent the American department store by making it more relevant to younger consumers and local markets. Key to Macy's improved performance is its My Macy's localization initiative, around which the nationwide retailer reorganized in 2008-2009. The initiative focuses on tailoring the shopping experience and about 10% to 15% of the store's merchandise assortment to the local market. So customers in Austin, for example, will find plenty of burnt orange apparel (the signature color of the University of Texas) and Austin-related merchandise, while shoppers in Columbus will find Ohio State licensed merchandise and plenty of golf attire, which is popular there. My Macy's combined with the retailer's omnichannel strategy, which integrates the in-store, online, and mobile retail experiences, and its MAGIC Selling customer engagement program have worked to drive sales across the chain. Macy's is also looking to Millennials, those between the ages of 13 and 30, for growth. By re-focusing merchandise assortments and marketing efforts to make them more exciting and relevant to those who grew up with fast fashion (H&M, Forever 21), Macy's hopes to win them over. The company has also increased its offering of exclusive merchandise, signing exclusive deals with Martha Stewart and Tommy Hilfiger.
At home, the world's largest department store is about to get even larger. Macy's has announced plans to spend about $400 million by fall 2015 to expand and overhaul its flagship location. The store, which occupies a square city block, will expand by converting space currently used for stock and offices to add 100,000 sq. ft. of selling space. – less