Macy’s Unveils New Strategy to Revitalize Brand and Attract Wealthier Shoppers
In an effort to revitalize its brand and appeal to wealthier shoppers, Macy’s has announced a new strategy that includes downsizing its stores and focusing on its successful luxury brands, Bloomingdale’s and Bluemercury. The century-and-a-half old retailer is aiming to adapt to the rapidly changing demands of shoppers and stay relevant in the retail market.
Downsizing is a key component of Macy’s new strategy. The company plans to close 150 underperforming stores, with 50 closures expected by the end of 2024 and the remaining 100 over the next few years. By 2026, Macy’s will have just 350 stores, a significant reduction from its current number. This move reflects the shift in retail and the changing preferences of US shoppers.
Luxury brands have seen success in recent years, as shoppers with means have been able to maintain their spending despite higher prices. Recognizing this trend, Macy’s will focus on its luxury brands, Bloomingdale’s and Bluemercury, which have outperformed the Macy’s brand. The company plans to open more, smaller versions of these stores over the next several years.
In addition to downsizing its stores, Macy’s will also build 30 smaller stores away from malls. This reflects a growing trend of consumers choosing smaller stores outside of enclosed shopping malls. Smaller stores are also more profitable for Macy’s due to lower operating costs.
Macy’s new strategy is not only aimed at revitalizing the brand but also at battling activist investors and boosting the company’s stock price and sales. The department store sector as a whole has been facing challenges from online retailers like Amazon, discount chains such as TJ Maxx, and online brands. Macy’s stock price has dropped significantly since 2015, and the company has closed nearly 300 stores. Last month, Macy’s announced layoffs of about 2,350 employees.
The struggles faced by Macy’s have attracted the attention of activist investors, with an unsolicited $6 billion bid to take the department store private being rejected. The activist group is now launching a proxy fight to take control of the board. Macy’s hopes that its new strategy will help turn the tide and regain investor confidence.
New CEO Tony Spring has expressed his excitement for this “bold new chapter” and believes that the strategy will reinvigorate the Macy’s brand. The company plans to improve its digital store and streamline its offerings. By focusing on brands and items that shoppers want, Macy’s aims to improve the shopping experience and provide compelling value to its customers.
As part of its new strategy, Macy’s will open 15 new Bloomingdale’s stores and 30 new Bluemercury locations over the next three years. It also plans to remodel 30 existing Bluemercury stores. Analysts believe that the expansion of Bloomingdale’s can be successful, especially in luxury markets where the chain is not currently represented.
Overall, Macy’s new strategy marks a significant shift for the retailer as it seeks to adapt to changing consumer preferences and regain its position in the retail market. With a focus on downsizing, luxury brands, and improved shopping experiences, Macy’s aims to attract wealthier shoppers and secure its future in the industry.
