Back in 2006, Macys was deemed the “Miracle on 34th Street” (recounted in ALL THE MOVING PARTS: ORGANIZATIONAL CHANGE STRATEGISTS), when then-CEO Terry Lundgren had mastered a major amalgamation among nine Federated department store brands. In recent times, it has been up to CEO Jeff Gennette to bring about a return to better times, after a few years’ slump.
The company under Gennette’s leadership has learned how to invest in its profitable stores, close others, and upgrade its online operations. Reporting second quarter earnings last week, the company was up 47% so far this year and 84% since the same time last year. Still, there were pessimists who managed to find something wrong with that. A Citi analyst said, “I’m not a believer that Macy’s is a long-term winner in retailing. Department stores are structurally disadvantaged. When you are selling other people’s merchandise, that is not a good spot.” Say what? What could this misguided person possibly think that Amazon does, other than “sell other people’s merchandise”? In fact, Amazon’s selling “other people’s merchandise” has made Jeff Bezos the richest man in the world. Good grief – there are sone analysts who don’t appear to be clear-headed enough to continue holding their jobs. And, I don’t believe for a minute that department stores are “structurally disadvantaged.” I believe that that is a myth that people like this fellow tell themselves. I’m not one of those people who are “dyed-in-the-wool shoppers”- who enjoy going into a store, or a series of stores in a mall; and browsing the merchandize; trying on various outfits, shoes; purchasing what works well; and walking out with bulging packages. But there are a large number of people who enjoy participating in this kind of shopping experience. And, I believe that when retailing finally sorts itself out, there will be a number of shoppers who are now using online services, just because it’s a “cool” thing to do, who will realize that they’d much rather go into a brick and mortar store and enjoy an actual shopping experience. Thus, my marching orders for Macy’s would be to continue doing what they’ve been doing and improving on those successful practices – the customers will be marching along with them.