After a disappointing first quarter (sales were down 0.7% to $6.232 billion), Macy’s Inc. outlined seven strategies to improve business, including higher-end product at top doors, a new loyalty program and the new off-price division.
“We are excited by the range of new initiatives being put in place today — both organic and through our new business development organization,” said CEO Terry Lundgren in an earnings statement. “Within our existing business, this includes an intensification of focus in our Top 150 stores, major growth trends in active categories and accelerating success in dresses, the vanguard merchandise category in our omni-channel reorganization. The launch of our new Plenti loyalty rewards program last week was very strong, far exceeding our expectations. Our new Thalia Sodi private brand in ready-to-wear, shoes and fashion jewelry clearly is resonating with customers and selling very well.”
CFO Karen Hoguet got more specific about the chain’s top doors in an earnings call with investors. “We are developing strategies to focus on our top 150 doors, and especially what we call our 30 platinum doors — our very best,” she said. “These 150 doors and the 30 were selected based on numerous factors including the recent sales growth, external economic factors in their markets, customer service scores in these stores, as well as their profitability. We believe there is opportunity to elevate these stores further and accelerate their growth and hopefully we will begin to see the benefit this fall particularly in the fourth quarter.”
Hoguet told investors that this may mean bringing in new brands and admitted that final clearance product (distinct from early markdowns) may be taking up too much space in the 30 platinum doors—product that may do better at the new Backstage off-price stores scheduled to open this fall.