NEW YORK — Karen Hoguet, chief financial officer of Macy’s Inc., took a swipe at Ron Johnson’s reinvention plan for rival J.C. Penney Co. Inc.
During a question and answer session at the Bank of America Merrill Lynch 2012 Consumer & Retail Conference here, Hoguet was asked if Penney’s ambitious plan “actually has the potential to change retail.”
Johnson, the former Apple Inc. retail chief who became chief executive officer of Penney’s last year, is transforming the chain with simpler pricing structure, fewer brands and shops-in-shop.
“You know, I really hate talking about competition,” Hoguet said, before proceeding cautiously.
She noted that Penney’s strategies were different from those of Macy’s, which is focusing on its omni-channel positioning, the My Macy’s localization program and Magic Selling training for sales associates.
“I think he [Johnson] said localization is overrated, omni-channel was not a part of their presentation, and I don’t believe there was much conversation about the selling-floor experience vis-à-vis sales associates,” Hoguet said. “So, interestingly, their team [offers] a very different approach to the business from what we are. I have been with Federated/Macy’s 30 years, I’ve grown up believing the product is where it all starts, and I think you’ll find the Macy’s merchants and our approach is a lot more focused on product and merchandising than I think the approach they’re taking vis-à-vis marketing.
“Obviously, it’s a good team of people, so we’ll see what happens, but it’s certainly challenging me to think, you know, is everything I’ve always believed to be right,” she said. “We’ll find out.”
At the very least, Hoguet sees an opportunity for Macy’s to take market share from Penney’s as the company resets.
“Even if what they’re saying is right, I think it’s going to be a tough year,” she said. “So I do see opportunity short-term, I happen to think long-term as well — you’d expect me to say that — but certainly in the short-term, I think there is opportunity for Macy’s and others as well to have a decent year as a result of all the change and dislocation.”
Penney’s move to bring in more brands puts the company in more direct competition with Macy’s. The rivalry between the two chains escalated when Macy’s sued Martha Stewart Living Omnimedia Inc. in January over the brand’s deal to set up shops-in-shop in Penney’s.
Here’s a look at what other top retail executives had to say on the first day of the two-day conference.
Charles Holley, executive vice president and cfo, Wal-Mart Stores Inc. • “We haven’t performed well in quite a while in the apparel area [in Wal-Mart U.S.].… Our comfort zone really is basics, in fashion basics, and I am talking about denim and T-shirts and socks and underwear, and when we focus on those, we’re really good in those.”
• “Wal-Mart now operates over 1 billion square feet of retail space worldwide. We know we can’t afford to grow, though, unless we manage our expenses well.”
Stephen I. Sadove, chairman and ceo of Saks Inc. • “We’re optimistic. The high-end customer is shopping. It’s a relatively benign environment. I don’t expect the markets are going to go into turmoil, and our outlook is relatively positive. The Dow [Jones Industrial Average] at 13,000, give or take a few hundred, is pretty healthy. I feel pretty good about the customer dynamic.”
• “What concerns me is something blows [up] on us. Something happens in Iran or in Greece.”
Michael Koppel, cfo and executive vice president, Nordstrom Inc. • “Customers are telling us that a more personalized experience, whether through a mobile device, online through e-commerce or in the store, is becoming more and more important. We want to be a leader in e-commerce, and we’re going to invest in it. Our operating model has changed. It’s less about building stores and having a long-term investment in a store and more about investment in e-commerce.”
Jonathan Ramsden, cfo and executive vice president, Abercrombie & Fitch Co. • “There is a potentially significant intangible benefit from store closures in terms of our ability to elevate the brands to be less promotional over time, and to reach a greater level of consistencies with our international positioning.”
• “With the increasing shift of retail business to e-commerce, we think having a true retail experience becomes a key differentiator and competitive advantage. And we think this is particularly true as we enter new markets and establish the awareness of our brands. For that reason, we expect to invest close to $300 million this year in new international stores.”
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