Macy’s has unveiled plans to open four new stores with a distinct format aimed at rejuvenating its brand, which has faced a decline in appeal for many shoppers. These smaller-format stores will be situated in strip malls, deviating from the company’s traditional mall anchor model. The locations, set to open in Boston, Las Vegas, San Diego, and suburban Indiana, will offer events and regularly rotate merchandise to keep the shopping experience fresh.
CEO Jeff Gennette shared that Macy‘s smaller stores outperformed the overall company in the latest quarter, with sales growth reported by stores open for more than a year. This trend was consistent even during the crucial holiday quarter. The new store concept has been tested through the opening of 10 similar stores in the past three years. Some were named “Market by Macy’s,” resembling mini Macy’s outlets, while others were called “Bloomie’s,” a scaled-down version of the upscale Bloomingdale’s department store.
With this fresh approach, the new locations will simply bear Macy’s name. The goal of these off-mall stores is to address the challenge of appealing to younger shoppers who may not view the 165-year-old department store as relevant to their preferences.
Macy’s has embarked on a three-year turnaround plan named Polaris, under CEO Gennette’s leadership, focusing on strategies like bolstering online growth and shuttering underperforming stores. However, the challenging consumer environment has posed obstacles to these efforts. While Macy’s surpassed sales and earnings expectations in the fiscal second quarter, it maintained a full-year forecast projecting a significant year-over-year sales decline, resulting in a 14% drop in its share price.
In addition to the store format changes, Macy’s is also working to revamp its brand image by launching new women’s apparel lines, such as On 34th, a tribute to its Herald Square flagship location. The company intends to refresh or replace all existing private brands and introduce three new ones by 2025. This multi-pronged approach underscores Macy’s determination to adapt and reinvigorate its identity in the face of changing consumer preferences and market challenges.
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