Byline: David Moin

NEW YORK — At Macy’s, the rebuilding continues.
The 91-unit chain was pulled out of a two-year bankruptcy when Federated Department Stores took it over in 1994. It merged with Abraham & Straus in 1995 and has taken a more centralized approach to merchandising the divisions.
Through all the turmoil, Macy’s has managed to hang onto its broad appeal and positive image as a family-oriented department store, reflecting the power of the Macy’s name and the chain’s resilience. The Thanksgiving Day Parade and Fourth of July Fireworks extravaganzas continue to pay off. And major expansion on the West Coast is in the works.
And the WWD survey underscores other strategies that seem to work. It indicates Macy’s primary strength lies in maintaining wide assortments. The store nosed out Penney’s in this regard, and was more highly rated by upscale households with annual incomes of $50,000 or more, as well as single women and empty-nesters.
Overall, Macy’s was selected first for its variety of merchandise and strong lineup of brands, sales and locations that are easy to get to. However, it polled second to Penney’s for ambience, quality, fit and value.
According to Macy’s East chairman and chief executive Hal Kahn, there’s still some fallout from the bankruptcy. “We have to continue to be more aggressive intensifying stock levels,” Kahn said in an interview. “We’re still living with cutbacks and lacking full assortments.”
Kahn said private labels, currently the fastest-growing business at Macy’s, and special sizes will play “major, major roles” in the rebuilding. The chain has broadened its advertising for the I.N.C. house brand, which isn’t price-promoted, to give it a hipper fashion image. Ads can be seen on city buses and in magazines such as New York. Asked about Macy’s accomplishments this year, Kahn said, “We added a layer of fashion and continued to develop core resources” such as Tommy Hilfiger, Ralph Lauren and Liz Claiborne.
He said the company has started to “strategize and implement a renovation plan in 15 to 20 stores, giving more space to fashion apparel businesses. A lot of doors haven’t been touched for years.” As part of the renovation strategy, assortments will be respaced, new fixtures brought in and lighting intensified, he noted. About $100 million will be spent in the next few years to renovate the Herald Square flagship. There’s a new cosmetics area on the main floor and a new special-size department on the seventh floor, among other changes so far.
Macy’s is doing more business with resources that sell day-in and day-out, leaving less merchandise to put on sale, and keeping profitability intact.
“We’ll achieve our profit plan for the year,” Kahn said, despite the fact that Macy’s sales volume for the year is “a little off plan.” Kahn linked the sales shortfall to fewer promotions. The chain posted $4.64 billion in sales in 1995.