Alejandro Cuauhtemoc-Mejia’s Post

Crumbs of comfort… many department stores are stuck in this comfort zone of doing things in the same way and expecting better results. Processes must be innovated. Experiences must be excellent. Customer service must be out of this world. Staying in the comfort zone will not increase profits. As Neil says… the decline is not over yet. #retail #TRE #departmentstores #stores #merchandising

The gradual demise of America’s department stores is not just history. It’s a lesson. Macy’s announcement that it’ll close 150 stores—nearly 30% of its total—is the result of a once-great industry in decades of decline. It comes as no big surprise. Their downturn can be blamed on many factors: competition from big box retailers, a shift to online shopping, activist shareholders fighting for control of the company’s board. But the key problem for Macy’s and others is more fundamental: they failed to evolve. While you can make money off a declining business model for years, data shows that once a company runs up against a major stall in its growth, it has less than a 10% chance of ever fully recovering. (See comment for link to research.) Department stores were once the giants of American retail. They reshaped how and where we bought everything, from clothing to appliances to toys to electronics. No longer. This is a wake-up call to those making money off a declining business model. It should push you to deeply rethink how you operate. And to reimagine how you create, distribute and capture value—not only to thrive but to address the transformational challenges of the coming decades. How are you anticipating what’s next and having the flexibility to evolve? #futuresthinking #foresight #innovation #strategy #growth

Macy's Inc. announced plans to close 150 of its less productive stores over the next three years, which is about one-third of its Macy's locations in the U.S. This move is part of a strategy to fend off acquisition attempts by activist firms Arkhouse Management and Brigade Capital Management. The closures aim to consolidate Macy's presence, possibly allowing employees from closed stores to transfer to nearby locations. Additionally, Macy's plans to open 15 new Bloomingdale’s and 30 Bluemercury locations by 2026 to focus on growth in its higher-end brands. This announcement was made alongside Macy's fourth-quarter results and follows a rejected $5.8 billion buyout offer. The new real estate strategy, unveiled early in CEO Tony Spring’s tenure, is expected to release $600 million to $750 million in assets by 2026. Despite beating fourth-quarter earnings estimates, Macy's forecasted full-year earnings and net sales below analyst expectations, describing 2024 as a year of transition and investment. Macy’s reported a decline in same-store sales across its brands, with the Macy’s namesake brand and Bloomingdale’s experiencing drops, while Bluemercury saw a slight increase. The company's long-term strategy includes adapting to changing consumer preferences for online and off-mall shopping, building on its earlier Polaris strategy aimed at closing 125 stores to stabilize profitability. Macy's emphasizes reallocating resources to its remaining stores and expanding small-format, off-mall locations, highlighting the significant role of real estate in its business model. #Macys #RetailTransformation #StoreClosures #RealEstateStrategy #Bloomingdales #Bluemercury #RetailIndustry #ConsumerTrends #PolarisStrategy #CorporateStrategy

This year has been one of change for department stores. New leaders have started at several chains. There are takeover and merger attempts in the offing. And we have heard a lot about step changes in the way operations are managed. While the word renaissance is far too strong, there has been hope that department stores can finally stem the long run of decline. Sadly, the results from the second quarter are not positive. Most of the main chains are still in decline and there is simply no real growth on the board. Sure, there are some crumbs of comfort. Sales at Nordstrom have now stabilized. The first fifty stores Macy’s has revitalized saw sales grow by 0.8%. And Bloomingdale’s, which is exposed to a soft luxury market, has performed admirably. But none of these things really change the trajectory. For the chains shown below, collective second quarter sales are down by 8.8% since the same period in 2019. That’s a reduction of $1.21 billion in revenue. And this has been delivered during a time when the consumer economy has been on fire. While changes are coming through and efforts are genuinely being made at some chains, these things will take quite some time to produce overall better numbers. And they will, at least in the immediate term, be offset by structural shifts as department stores continue to close stores to meet new levels of demand. The decline is not yet over. The very modest hope is that it will reach a plateau in the next few years. ___ For reference, here are the Q2 2019 v Q2 2024 sales changes: * Kohl's: -15.4% * Macy's: -11.0% * Nordstrom: -0.6% * Dillard's: +4.4% #retail #retailnews #departmentstores #economy #spending

Stepping into the role as Macy's Chief Executive, Tony Spring faces dual challenges: rejuvenating stores and fending off a potential takeover bid from investors. With Bloomingdale's as his background, Spring aims to infuse innovation into Macy's amid shifting consumer trends and digital retail dynamics. The proposed $5.8 billion buyout bid by Arkhouse Management and Brigade Capital Management only intensifies the scrutiny on Spring's leadership. Macy's, with its diverse customer base, must differentiate itself by attracting younger shoppers, especially Gen Z. The threat of activist investors eyeing Macy's real estate assets complicates Spring's agenda, necessitating a holistic strategy beyond traditional cost-cutting measures. As Spring navigates Macy's transformation, stakeholders eagerly await its outcome, underscoring the importance of innovative solutions in today's retail landscape. #RetailLeadership #BusinessTransformation #MacysCEO #RetailInnovation #amsterdamassociates

🛍️Macy's, America's sweetheart department store, is closing 150 stores, constituting 30% of its overall footprint. This strategic move is aimed at revamping the troubled retailer's image and aligning with a luxury-focused approach to enhance sales. The closures primarily target underperforming locations as part of the company's effort to fend off activist investors seeking control of its board. Instead, Macy's plans to concentrate on the expansion of its successful higher-end chains, Bloomingdale's and Bluemercury, recognizing the evolving consumer trend towards either budget-friendly or upscale offerings. This shift positions Macy's to better serve the changing market dynamics, with the middle-class consumer base dwindling. Notably, Macy's stock has experienced a significant decline, plummeting by 75% since its peak in 2015. 📉 If Macy's isn't safe from the rapidly changing consumer behavior and middle class buying power, why would you?! If you can't win on tiny margins like Walmart, I would try focus on serving, "the rich" or "the upper class", or what I call them - "the new middle class". 💰 #marketing #macys #retail #consumerbehavior #buyingpower

Macy’s Inc. has a new turnaround strategy that excited Wall Street, but the department store is recycling an old turnaround strategy that smacks of desperation to keep the idea of the American middle class — and upward mobility — alive, writes Leticia Miranda for Bloomberg Opinion. Over the last half a century, the middle class has tumbled and taken Macy’s down with it. Decades of fiscal policy, recessions and inflation all combined to hollow out middle America. Middle-class incomes have grown at a slower pace than higher-income households, resulting in a wider wealth gap. At the same time, consumer trends splintered along economic lines. Pinched shoppers shifted their spending to off-price stores such as T.J. Maxx, while well-off ones went higher up the value chain toward luxury brands.  #retail #shopping #middleclass #money #economy https://lnkd.in/dNJK25ER

Macy’s Consistent Profits Have Faded & The Iconic Department Store Is Betting On Itself. Last week, Macy’s walked away from deal talks with two #investors, leaving the iconic American department store to tackle the challenging #retail landscape alone. The deal, which would have valued the #Macys enterprise at some $9B, was squashed after Macy’s board had concerns that the #financing for the proposed deal wasn’t solid enough, sending shares in the company down more than 14% since the deal was called off one week ago. The buyout saga, which began in December, saw the bid raised twice before ultimately being abandoned. But, the potential buyers weren’t reportedly interested in “Macy’s: The Enterprise” so much as they wanted “Macy’s: The Real Estate Portfolio”. The company's #property portfolio is estimated to be worth anywhere from $5B to as much as $14B. Despite bouncing back relatively strongly from COVID-19, Macy’s once-reliable #profits have all but dried up: in the last 12 months the company has reported $13 M in net #income — a figure that was routinely over $1B in prior years. By ending talks, Macy’s execs are signaling that they will forge ahead with its #turnaround plan. That’s a bold move considering that peers such as #JCPenney and #Sears have succumbed to #bankruptcy, E-commerce continues to grow, and inflation-weary consumers are showing signs of weakness. The strategy is focused on doubling down on its top 50 outlets, closing underperforming stores, and adding new #Bloomingdales and #Bluemercury locations. Macy's is preparing to celebrate the centenary of its #Thanksgiving Day Paradethis year... its next 100 years might require some reinvention. JSesko@meridianfinance.com 818-914-9271 #tradecreditinsurance

My take on Macy's. Too little, too late, and living in “death by a thousand cuts”. The board looks to have a diverse mix of talent that includes tech and other industries. What is the transformational play? A few store closures is not modernizing a business that has been on a 10+ year downward spiral by every definition (market cap from $23b to $5b, revenue from $28B rev to $23B, market share). One idea (many should be on the table): - Carve out Bloomies - Right size fleet at lease expirations and via buyouts - Sell .com to Wal-Mart (there’s overlap in customers and ability to cross/up sell) What ideas do others have? What levers would completely transform the online & in store experience? Board Members: https://lnkd.in/g6Fb_atS #futureofretail #legacyretail #retail #retailtechnology https://lnkd.in/gyH75_d2