Macy’s Gets Set for Holiday Sprint

Some new strategies may give the $27.7 billion department store an extra lift during the selling season.

NEW YORK — There are six fewer days between Thanksgiving and Christmas this year, but Macy’s isn’t put off by the calendar.

This story first appeared in the May 30, 2013 issue of WWD.  Subscribe Today.

“The key thing is we are not as concerned about promotions, the way that others are beginning to talk about it,” said Karen Hoguet, Macy’s chief financial officer, who, along with Macy’s chief stores officer Peter Sachse, exhibited a cool attitude toward dealing with the shorter holiday selling season during a “fireside chat” at the Citi 2013 Global Consumer Conference here.

“We have set our promotional calendar and will stick to that promotional calendar, and it won’t be much different from last year or the years prior,” Sachse said. “We are thinking about holiday 2014 now. Holiday 2013 is pretty much set now.”

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Having fewer selling days between Thanksgiving and Christmas, Sachse said, “usually doesn’t impede the comp. When you have the extra day, it usually doesn’t help the comp,” meaning the comparable-store sales results.

“When you have that longer calendar, it’s harder to get that customer motivated,” Sachse added. “The customer doesn’t think about weeks like we do. The customer thinks about days.”

“The only thing you worry about are snowstorms,” Hoguet said. “That’s something you can’t control.”

Last year, there were 32 days between Thanksgiving and New Year’s. This year, there are only 26. Last year, retailers opened with a strong Thanksgiving weekend, though business dragged until the last few days before Christmas, making for an agonizing season. “If last year felt like a marathon, this year will feel like a sprint,” Sachse said.

This year, the $27.7 billion Macy’s might get an extra lift through some new strategies, including:

• A big focus on apparel collections for Millennials. “The majority of them, in the neighborhood of 13, roll out for fall,” Sachse said. “We are making major floor moves in anticipation of deliveries.” Sachse also said Macy’s is “incredibly focused” on Hispanics.

• Fulfilling orders from stores is “a game changer,” potentially enabling Macy’s to make significant improvement in inventory turnover and margins, though they are expected to be flat or slightly down this year. By the end of the year, about 500 Macy’s stores will be equipped to ship online orders.

• Opening a smaller-format, one-level Macy’s in the Gurnee Mills outlet center in Gurnee, Ill. It’s a regular-priced Macy’s, not an outlet, and it’s considered an experiment, putting Macy’s in a different type of location. Macy’s does not operate any outlets, though Bloomingdale’s has 12.

• A new approach to remodels. “There are a bunch of different buckets,” Sachse said, citing “quick hits” involving growing a category that’s hot, such as handbags, and blowing it out in a few hundred stores, and major remodels in areas experiencing population growth. “A lot more people are moving to Texas than Illinois,” Sachse pointed out. Macy’s capital spending budget will exceed $1 billion next year compared with this year’s $925 million.

Asked about Amazon as a competitive threat, Hoguet replied, “We don’t belittle for a minute that Amazon is a competitor we have to watch, but fashion is different.”

“We don’t have a showrooming problem — it just isn’t there,” Sachse said. “Well over 50 percent of the stuff we sell you can only get at Macy’s. With Ralph Lauren, 10 to 25 percent of what’s sitting on that floor you can only buy from us.”