By  on September 6, 2008

The beat of a pumping Rihanna song becomes clearer going up the escalator at Macy’s flagship in Herald Square. Reaching the fourth floor, the song is booming—teens and their parents dance to “Don’t Stop The Music” as they shop for items from brands like Baby Phat, XOXO, Paris Hilton, justweet and American Rag.

It seems appropriate for Macy’s juniors floor, which is 42,000 square feet in this location, to be called “This Is It!” as it is clearly the store’s most energetic and colorful. But it hasn’t always been like this, as the massive department store has seen its ups and downs in juniors—working to compete with specialty stores and striving to stay a step ahead of the finicky teen shopper.

“We recognize that she is fickle and that there are a lot of sides to the junior customer,” says Denise Filchner, vice president of fashion merchandising at Macy’s. “She is preppy, rocker chic, urban, she is in high school, in college—there are lots of different girls on the floor.”

While brands like DKNY Jeans, Guess, Baby Phat, Necessary Objects and Dollhouse all serve the junior customer in different ways, Filchner says one of the department’s most successful additions has been American Rag, which is Macy’s private label brand in the junior area. The line first hit stores in August 2003 with its own in-store shops. Macy’s executives felt so strongly about the launch of the brand they predicted it would reach over $100 million in sales in its first year. Although Filchner won’t comment on its current volume, she says it has surpassed expectations.

“This is a big one for us,” Terry Lundgren, Macy’s president and chief executive officer, told WWD in April 2003. “Usually when we launch a new branded resource, it’s not that aggressive out of the box. But our divisions feel so good about American Rag that they’ve been quick to jump on it.”

Today, Filchner contends American Rag has great brand recognition and a strong following among customers, who regularly shop the line for its consistent fit across its categories — jeans, T-shirts, outerwear and other casual sportswear items.

“A lot of people think the junior customer isn’t into quality, but through extensive research and communication with her, we know she does value a product that is going to hold up over time,” Filchner says. “With American Rag and other lines on the floor, we have traded up that value, an important innovation that has reinvigorated our floors.”

Jane Buckingham, president of Youth Intelligence, a market research and consulting firm focusing on Generations X and Y, says she has seen some “great improvements” in the juniors departments at Macy’s.

“It’s a hard area to keep contemporary, but they’ve done a very good job, particularly through in-store events, having a DJ in the stores and the overall attitude on the floor,” Buckingham offers. “Staying relevant is so important to this customer, and Macy’s has managed to do that quite well.”

Buckingham says while there is always room for improvement, she agrees Macy’s has done well to keep the merchandise fresh and fashion-forward, the prices on the moderate side and the trends relevant.

“I used to feel that Macy’s wasn’t the first choice for teens to shop for clothes, but they would wind up there with their parents,” she says. “Macy’s has really done a great job by keeping it parent-friendly, but also making it cool enough so teens want to be there, too.”

Buckingham says she had seen a trend in teens migrating to boutiques from department stores. However, more recently, she has seen teens return to stores like Macy’s since it has better return policies and a better array of merchandise.

“I feel like Macy’s was one of the first department stores to embrace that specialty store feeling in juniors,” she notes. “Teens are realizing that department stores have a better filter than a lot of specialty stores do, and Macy’s has a wider range of products.”

Filchner, meanwhile, says one of the biggest challenges in juniors is always going to be to stay ahead of the customer. Currently, she says teens are extremely environmentally conscious, so Macy’s is working on ways to become “greener.” For the back-to-school season, Macy’s has a “Lose Your Blues” promotion, where teens can bring in their old jeans and exchange them for a new pair at a discounted price. In turn, Macy’s will have the old jeans recycled.

“We are always looking for what’s new and next and emerging,” she says. “But my advice to any new brand wanting to get into the store is that when it comes to juniors, it’s more about the product than the brand. New designers have to do their homework, and seeing how the consumer shops our stores tells us we have to sell product that stays consistent in fit, quality and in style. And, most importantly, deliver on time.”

Filchner also stresses the growing importance of celebrities in teens’ lives. Whether it’s through an in-store appearance, a special guest DJ or selling Jennifer Lopez’s collections, Macy’s is always seeking ways to bring the celebrity element into the stores.

“This customer is so in tune with what’s happening. She’s on the Internet, she’s watching ‘Gossip Girl’ and ‘Project Runway,’” she says.

One vendor, Alden Halpern, president of Tyte, a junior denim brand, says he has been selling his brand at Macy’s for more than 10 years, but it’s only been in the past six months that his business has taken off.

“I’m now in every single Macy’s store in the country,” Halpern says. “We’ve built a strong relationship and I really believe they have respect for me and my business. They are about working together, which is great for all of us.”

Halpern’s latest deal is shipping a new junior jeans brand, Noble, exclusively to Macy’s starting this month. “It used to be that Macy’s was a little overassorted with a sea of merchandise on the junior floor,” he says. “But over the last two years, they’ve been able to narrow it down, and it makes more sense to the customer. You get that boutique feeling on the floor and it’s working.”

And now that Macy’s has made major advances in juniors, it’s aiming to gain momentum among the younger set. The children’s floor is also beefing up to become a destination where kids can find everything for back-to-school, summer camp and beyond.

“Once we got American Rag off the ground in juniors, we noticed the kids’ world needed something hip and trendy,” Filchner says. “So we now have Epic Threads for the tween customer, which is for that kid who wants to look hip at school. Kids want to be hip. They want to be older—they want to be teens.”

Epic Threads has been doing well, Filchner says, as it is designed for tweens who want cool, original clothing to express their personalities. The brand takes cues from popular skate and streetwear brands for an urban, edgy feel. It has a strong denim base and a high-energy color palette.

Also in the children’s area, First Impressions has launched as a premier layette brand, another exclusive to Macy’s. The label has fast become the number-one brand in layette. First Impressions includes clothing, socks and shoes as well as gift items packaged together for a baby shower.

“It offers everything needed for the newborn’s closet and everything has been so well thought out, from the satin hangers the items come with to how it washes,” she explains.

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