Macy’s Last Act moves the store in a different direction

Macy’s is soon to report their Q2 earnings. Shortly after their Q1 reporting, Macy’s announced they would be testing a new store concept in Easton Town Center, Columbus, Ohio. This concept is aimed towards selling millennials and an upscale customer. The format includes enhanced selling and service, an expanded wedding department, an upscale fine jewelry department and much more.

Herald Square has also gone through a $400 million massive renovation with an enhanced assortment including Gucci. High end restaurants, a champagne bar and an enhanced beauty area including La Mer and Tom Ford beauty.

However, Macy’s direction is inconsistent. We recently shopped Macy’s Herald Square to see their back-to-school offering. There were some exciting displays, a restaurant on the Junior floor, plus a blow dry bar, however, there was also a large floor set dedicated to their “Last Act” and discounting across the new merchandise.

Macy’s Last Act comprises major clearance sections in every department of every store, whether it be juniors, missy, mens etc.

Jane Hali & Associates View

Updating a store format to create more traffic is essential. Creating an off-price division (“Macy’s Backstage”) is also critical for a department store today. Macy’s Backstage as a department within Macy’s stores will also bring new brands to the store. However, having these “unsightly Last Act departments” within the store devalues the upscale and millennial strategy that Macy’s has tried to build. Last Act also brings the direction of the store to a more moderate customer in direct competition with KSS & JCP.

Management says the Last Act areas are doing well. In our opinion, this is a short term fix that will have long term negative results.

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