Macy’s Inc. 2019 Strategic Initiatives to Drive Growth
The company will carry three of its 2018 strategic initiatives forward and add two new areas of focus in 2019. Growth150- which is to expand growth investment strategy to another 100 stores. Secondly add backstage locations to 45 Macy’s stores and deliver positive comparable sales for the Backstage stores previously opened. Third is Vendor Direct which was build on the success of the 2018 launch with continued aggressive expansion of vendors and SKUs. The ‘mobile first’ strategy enhances the Macy’s mobile app with new features and functions to deliver outsized growth in mobile sales.
Macy’s is looking at Investing in areas where the company already has strong market share to drive disproportionate growth. These categories are dresses, fine jewellery, big ticket, men’s tailored, women’s shoes and beauty.
The company also intends to focus on innovation both through technology and new economic models. The company will double the number of Market @ Macy’s locations, all of which will be powered by the b8ta platform. The company will also continue to expand its virtual reality furniture experience in 2019.
“2018 was an important year for Macy’s, Inc. as we changed the trajectory of the company and delivered positive comparable sales for the full year. I’m pleased with the impact of our strategic initiatives, particularly as they gained traction in the back half of the year,” said Jeff Gennette, Macy’s, Inc. Chairman & Chief Executive Officer. “Looking at the fourth quarter of 2018, while we delivered positive comparable sales against what was a strong holiday season in 2017, results were lower than our expectations. We experienced another quarter of double-digit growth in digital. We also saw continued improvement in our brick and mortar trends with the Growth50 stores outperforming the fleet.”
“We know that when we listen to our customers, we win. And when we invest in our business, we grow. In 2019, we will continue with a balanced investment approach, and we are confident that Macy’s, Inc. is on the right path to deliver sustainable, profitable growth,” continued Gennette.
“The North Star Strategy is working. Macy’s is heading into 2019 a stronger business than we were a year ago – with healthier stores, a growing e-commerce business and a mobile experience that is resonating with our customers. We are executing a balanced investment strategy that supports all three of these components, with investment directed towards areas we know have the highest returns,” said Gennette. “We are also a more agile and flexible organization. The steps we are announcing to further streamline our management structure will allow us to move faster, reduce costs and be more responsive to changing customer expectations. Importantly, these changes build the foundation we need to achieve meaningful enterprise productivity improvements. These actions impact colleagues who have made strong contributions to the company over the years, and I thank them for their service.”
Funding Our Future
As part of the North Star strategy, Macy’s, Inc. is committed to increased productivity to fund investment in the business. The company has launched a comprehensive, multi-year program focused on growing its profitability rate by improving productivity across the enterprise. The program includes initiatives to improve margin through enhanced inventory planning and operations, supply chain efficiencies, pricing optimization, improved private brand sourcing and customer acquisition and retention strategies.
As an initial step in this productivity plan, the company has announced a restructuring that reduces the complexity of the upper management structure to increase the speed of decision making, reduce costs and respond to changing customer expectations. Importantly, it also allows the company to put additional resources behind three focus areas:
Ø Improving supply chain efficiency;
Ø Innovating and enhancing inventory management; and
Ø Building a larger and healthier customer base.
In addition to the expected 2019 savings, the company anticipates that these activities will fuel the productivity plan over the next 3-5 years and contribute significantly to profitable growth.
The areas for cost reduction in 2019 have been identified and are reflected in guidance. Beginning in 2019, the company expects the restructuring actions announced recently to generate annual expense savings of USD 100 million. For fiscal 2018, the company recorded one-time charges of approximately USD 80 million pre-tax for restructuring activities.
With fiscal 2018 sales of $24.971 billion, Macy’s, Inc. operates approximately 680 department stores under the nameplates Macy’s and Bloomingdale’s, and nearly 190 specialty stores that include Bloomingdale’s The Outlet, Bluemercury, Macy’s Backstage and STORY. Macy’s, Inc. operates stores in 43 states, the District of Columbia, Guam and Puerto Rico, as well as macys.com, bloomingdales.com and bluemercury.com. Bloomingdale’s stores in Dubai and Kuwait are operated by Al Tayer Group LLC under license agreements. Macy’s, Inc. has corporate offices in Cincinnati, Ohio, and New York, New York.News US