...Jacqueline Supman Merchandise Strategies Case Study: Macy’s Private Label Macy’s current hodgepodge of brands, products and spokespeople is no coincidence. The backbone of the retail giant has always been bringing together the best selection of goods and services through partnerships and collaborations, starting in 1929 with Fred Lazarus, the puppeteer behind F&R Lazarus and the John Shillito Company (which was the oldest department store at the time). Fred famously arranged a meeting with Walter Rothschild (of Brooklyn-based Abraham & Straus), Louis Kirstein (of Filene’s) and Samuel Bloomingdale (head of namesake company Manhattan's Bloomingdale's) and decided to merge their stores into one. Rothschild, and Kirstein quickly agreed on the spot, and Bloomingdale joined the next year. 1 The company’s headquarter location was set up in Cincinnati in 1945 and over the next thirty years additional locations popped up in major cities across the U.S. The Federated company continued to purchase department stores over time, but it was not until the 90’s that the company bought 50% of the existing Macy’s debt, setting the company up for acquisition within the next two years. The first Macy’s store opened in Manhattan in 1858 by a gentleman named Rowland Macy. Forty years later after the death of Rowland, Macy’s was bought by the Strauses, who expanded the retail empire across the U.S. Unfortunately after taking the company private in the late eighties, the...
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...Macy’s Inc. has presence in the U.S, Puerto Rico, United Arab Emirates, and Guam. In the U.S, Macy’s operates around 870 stores in 45 states under the names of Bloomingdale’s, Macy’s, and Bluemercury. Macy’s have distribution centers and department stores in the U.S. The state of Alaska, Nebraska, Mississippi, Iowa, and Arkansas does not have a Macy’s department store. Macy’s have approximately 26 distribution and fulfillment centers nationwide. Hawaii State has one distribution center. Moreover, Macy’s ship to more than 100 countries worldwide from the U.S, the U.S is the country in which Macy’s exports their products to other countries. According to CNNMoney, Macy’s will be closing more than 40 stores in the USA during the year of 2016 due to a decrease on sales and earnings for the year of 2015. In previous years, Macy’s Inc. has closed approximately 52 stores and only opened 12 new ones. Mainly, the stores located in malls are the ones in danger of closing because of Macy’s existing online competitors such as Amazon. Macy’s have decided that they will shift...
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...1.1 Current and Historical Background Macy’s, Inc. was founded in 1929 and brought together three of the nation’s reputable department stores: Abraham & Straus, Filene’s, and Bloomingdales, under a common holding company named the Federated Department Stores. “The roots of these individual stores stretches back well into the 19th century and deep into the fabrics of the communities that they served”. This merger under the Federated Department Stores name left each department store with its brand name intact, while linking the financial aspects of them each into a single company. In 1945 the holding company evolved into an operating company, which began expanding and acquiring across the United States. By the early 1960’s the operating company had grown to 14 divisions with annual sales exceeding $1 billion, and by the 1970’s they had quadrupled this figure by following the population migration to the suburbs. In the start of the 1980’s Federated now had 20 divisions and over 364 stores. At the end of the 1980’s Federated was under siege by Robert Campeau through a leveraged takeover and only two years later in 1990 they filed for Chapter 11 Bankruptcy. During the proceeding years the company was consolidated down and emerged as a “new” public company, acquiring Macy’s in 1994, and soon after opened macys.com. In the 2000’s Federated acquired May Company, a long time competitor and doubled the size of the company; this placed a Macy’s in 63 out of 65 of the top US markets....
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...The regional director of Macy's New York-area stores, Michael Dervos, In 2007, was visiting Flushing, Queens store shoe department and he noticed that sizes available were size 9 and above. A question came to his mind, why these sizes if many of the store's customers are Asian Americans? This customer segment tends to have smaller feet. This event triggered a new strategy called My Macy's. Over the past three years, the strategy has enabled the department stores retailer to double earnings. It is a good moment to highlight that it is a period during which most retailers serving the middle class have struggled. Exhibit 1 shows My Macy’s website customized for Carlos Garcia. Exhibit 1: My Macys website (retrieved from http://www1.macys.com/index.ognc?cm_sp=navigation-_-top_nav-_-macys_icon) At Kohl's, for instance, earnings plunged 13% for the period, and at J.C. Penney earnings rose just 32%. Talking about the same three years, Macy's stock climbed more than fivefold, to $38.07 (prices and related data are as of Dec 14, 4:00PM EST). Exhibit 2 shows Macy’s stock performance in the last five years. Exhibit 2: Macy’s Stock Price (retrieved from http://finance.yahoo.com/echarts?s=M+Interactive#symbol=m;range=5y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;) According to May (2012), the Cincinnati-based department store chain (NYSE: M) has grown sales by more than $1 billion in each of the last two years and saw...
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... ------------------------------------------------- table of CONTENTS EXECUTUVE SUMMARY Since the first opening in 1858 in New York the “world’s largest store” became iconic for the department store industry. From the beginning Macy's Inc. stated its mission to satisfy a consumer as a paramount and recognized that all actions and strategies must be directed toward providing a localized merchandise offering and superior shopping experience. Organization has been following that principal for over a decade and today Macy’s targeting consumers through dynamic department stores and online sites. Main issue Advancing e-commerce and internet technologies cause recent declines in sales in the entire industry. Online retailers offer more convenient and fast shopping on the internet directly from your personal computer or smartphone. Along with efficiency online retailers striking department stores with lower prices and easy shipping. Trends became so effective that consumers rapidly shifting towards online retail channels leaving department store business with a need to create an effective strategy to overcome threats and insure their future in the industry. Strategy Recommendations Department stores such as Macy's and its main competitors Sears, JCPenney, and Dillard's operate as an upscale...
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...SWOT Analysis Strengths * Very strong brand equity with exclusive merchandise * Includes 15 private brands in portfolio including Alfani and American Rag * Bloomingdale’s (Macy’s subsidiary) focused on niche markets involving upscale customers * Purchasing power to secure better prices * Mixing new and old channels for the benefit of the brand as a whole by being able to advertise online and back it up with brick and mortar stores * Large contributor to charitable organizations such as Go Red for Women and United Way * Very large store sizes * Ability to register wedding gifts/baby shower gifts online * Use of social media such as Facebook * “My Macy’s” program rolled out nationally to enhance efficiency in a sunken economy by forming a unified operating structure, which has been estimated to save $500M annually Weaknesses * Decline in comparable retail sales from economic downturn * Litigation leading to bad press regarding merger with May Department Stores Company, where board of directors were allegedly fiduciary duties of loyalty and good faith to May shareholders * Impersonality of a national brand where one size does not fit all * Finding a middle ground between Wal-Mart bargain customers and higher-end Neiman Marcus and Nordstrom customers; Bloomingdale’s is more for higher-end customers, but persuading shoppers from Wal-Mart is difficult * Adjusting to evolving customers who do research online and are well-informed...
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...Vs. Financial Analysis Veronica Nowell July 19, 2013 Dr. Agbatutu Accounting Theory and Practice BUSN 6070/ M 5:45- 9:45 Table of Contents Macy’s Overview…………………… Macy’s 5k analysis…………………… Marshalls 5k analysis………………… Comparison of Macy’s and Marshalls………… Conclusion………………………………… References……………………… Overview of Macy’s Eighty-one years ago on the morning of March 6, 1929, millions of Americans opened their edition of The New York Times to find a headline that would send the business and retail world into a spin of excited chatter and speculation - “Abraham & Straus and Filene’s to Unite.” The announcement marked the beginning of the evolution of what was to become one of the largest and most influential corporations in retail history. Federated Department Stores, Inc. (renamed Macy’s, Inc. in June 2007) was born through the combination of Abraham & Straus of Brooklyn, Filene’s of Boston, F&R Lazarus & Co. of Columbus, OH, and Bloomingdale’s of New York. Each of these retailers was an established, prominent presence with a rich history of its own. In joining together, they agreed to maintain their separate identities while linking their financial interests. These pioneers recognized the immense opportunity that lay before them and on November 25, 1929, Federated Department Stores was incorporated as a revolutionary new company in American retail. As Federated emerged in the years of the Great Depression and World War II, it became apparent that the corporation...
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...Macy’s Inc. is one of the nation’s largest and well known department store chains. Started over 150 years ago, Macy’s has continually generated excellent returns for its shareholders and employees. After, the global recession, Macy’s has generated huge profits with same store sales increasing 5.3% year to date in 2011. In 2012 same store sales increased 4.6% in (Macy’s Inc., 2012). Both 2013 and 2014 have also created large profits for the retailer. A primary component of this increases profitability is the overall shopping environment. Consumers now demand instant gratification and quick transactions. Therefore, lines, and there subsequent wait times are very important. Lines are very important as they can deter from the consumer experience, and the overall purchasing activity of the consumer. Retailers, must be cognizant of lines and congestion to help increase sales while also increasing the overall customer experience. While observing a local Macys location, consumer traffic was particularly heavy due to the holiday season. Typically,...
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...EXECUTIVE SUMMARY Macy’s Department Stores, Inc. is a large organization with many stores, departments, and employees. They have a quick employee turnover rate and high goal setting. They expect their employees to reach sales goals in set periods of time which causes stress amongst the ranks. Each department in a store is accountable to one or more managers, those managers have a floor manager and so on. Although it is tough to work for Macy’s, the goals they set have allowed them to thrive in the competitive department store world. There are three levels to the makeup of a company. Each level has many independent variables; we will be focusing on one for each level. The first level is the individuals with their skills and abilities. By using a questionnaire and sales results, we found how employees use their skills and abilities to meet their day-to-day goals. The next level is group processes. At Macy’s, departments are expected to meet goals from all their employees together. The independent variable that we chose to analyze is group characteristics. This also uses the questionnaire and sales results used for the individuals. The last independent variable that will be discussed is the organizational goals. When employees meet their goals, this allows the group to perform well and the whole store is better off. Each store competes to help Macy’s be a great organization. In our analyses we found that workers at Macy’s are stressed to meet their goals. This stress factor...
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...TEAM assignment. Organizational Culture: Macy’s Team Member: A, B, & C PSY/450 June 8, 2015 Dr. Rachael Dilts Organizational Culture: Macy’s Organizational culture is defined as an organization’s values, behaviors, expectations, experiences, and philosophy. The main idea of organizational culture is what behavior and values contribute to the organization’s social and psychological environment. Organizational culture is also known as corporate culture and is shown by how the organization treats its employees, customers, and the community. It also is shown through the way the company conducts business. Organizational culture success can be measured by a company’s productivity and performance. Successful organizational culture provides guidelines for service, product quality, and safety. Success can also be seen through attendance and punctuality of employees. Every organization has a unique culture, and if that culture is not successful, it is hard to change ("Organizational Culture", 2015). Macy’s: The Company Macy’s was founded by Rowland Hussey Macy in 1859 and was nothing but a single dry goods store in New York City. Over the years, Macy’s has grown to be one of the nation’s top retailers in fashion and affordable luxury. Macy’s attributes its success to its employees. Macy’s has many successes including; being the first retail store to promote a female into an executive position and starting the Macy’s Thanksgiving Day Parade. The parade was organized...
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...The Drive to Differentiate Macy’s • BlooMingdale’s 2007 AnnuAl RepoRt Financial Highlights 2007 Net Sales (in billions) Change in same-store sales (Note 1) (in billions) 2006 $ 26.970 4.4% $ 1.836 6.8% 2005* $ 22.390 1.3% $ 2.424 10.8% $ 26.313 (1.3)% $ 1.863 7.1% % of Sales (in billions) (Note 2) % of Sales $ 2.082 7.9% $ 2.273 8.4% $ 2.138 9.5% Macy’s, Inc. is one of America’s premier national Macy’s, Inc. is one of America’s premier national retailers, operating 40 Bloomingdale’s stores retailers, operating 40 Bloomingdale’s stores and more than 810 Macy’s stores in 45 states, and more than 810 Macy’s stores in 45 states, the District of Columbia, Guam and Puerto Rico. the District of Columbia, Guam and Puerto Rico. The company also operates macys.com, The company also operates macys.com, bloomingdales.com and Bloomingdale’s By Mail. bloomingdales.com and Bloomingdale’s By Mail. Income from Continuing Operations Income from Continuing Operations, Excluding Certain Items (Note 3) Net Income $ 2.01 $ 2.15 $ 1.97 $ 1.80 $ 2.08 $ 1.81 $ 3.16 $ 2.53 $ 3.24 (in billions) $ 2.231 $ 3.692 $ 4.145 Operating (in billions) (Note 4) $ 1.149 $ .457 $ 1.163 • macy’s, inc. 2 2 The Drive to Differentiate With so many choices today, shoppers are looking for retailers that stand out from the crowd. That’s why Macy’s and Bloomingdale’s are aggressively driving to deliver a differentiated shopping experience...
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...FOCUSED ON THE CUSTOMER MACY’S, INC. • 20 09 ANNUAL REPORT MACY’S Macy’s, established in 1858, is the Great American Department Store – an iconic retailing brand with about 810 stores operating coast-to-coast and online at macys.com. Macy’s offers powerful assortments and the best brands, tailored to each and every customer with obvious value, engaging service and unforgettable moments. MACY’S, INC. IS ONE OF THE NATION’S PREMIER RETAILERS, WITH FISCAL 2009 SALES OF $23.5 BILLION. THE COMPANY OPERATES THE MACY’S AND BLOOMINGDALE’S BRANDS, WITH ABOUT 850 DEPARTMENT STORES IN 45 STATES, THE DISTRICT OF COLUMBIA, GUAM AND PUERTO RICO AND THE MACYS.COM AND BLOOMINGDALES.COM ONLINE SITES. Celebrating the Magic of Macy’s Clearly, Macy’s is distinctly different from other major retailers. Macy’s embraces customers and provides an experience that transcends ordinary shopping. Our heritage includes magical special events – the Macy’s Thanksgiving Day Parade, Fourth of July Fireworks, flower shows, fashion extravaganzas, celebrity appearances, cooking demonstrations and holiday traditions ranging from the arrival of Santa Claus to tree lightings and animated window displays. But beyond these signature events, Macy’s delivers magical moments every day with our merchandise, a great deal of which is sold exclusively through our stores, as well as our shopping environment and service. You’ll see our newest looks in fashion magazines. Our associates take the extra step to...
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...| Macy’s Inc. Valuation Report | | Table of Contents Objective 2 External Sources of Information 2 Company Identification 2 History 3 Executive Management 3 Financial Overview 4 Stock Classes and Ownership 5 Market Data and Analysis 5 Overview of Valuation Approach and Method 7 Valuation Results 9 Appendix A 10 Appendix B 11 Macy’s Valuation Report Objective Our objective is to estimate the Free Cash Flow (FCF) value of Macy’s Inc. as of July 24, 2011 (date of valuation). Macy’s Inc. is a C-Corporation organized under the laws of Delaware. It is primarily engaged in the business of premier retail fashion. The standard of value was Free Cash Flow Value, which measures the company’s ability to generate cash after accounting for capital expenditures, which is a fundamental basis for stock pricing. FCF provides a viable indication of Macy’s ability to develop new products, buy back stock, pay dividends, or reduce its debt depending on the amount of cash the company has to expand. Since FCFs indicate the financial health of a company in its current environment, this valuation’s purpose is to determine Macy’s ability to increase stock prices and maximize shareholder wealth. External Sources of Information We have used various external sources of economic and industry data to assess the condition of the general economy, trends in the fashion retail industry, and the condition of the securities markets. Among those sources, we used Plunkett Research...
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...Memo of Macy’s Department store repositioning Case Synopsis The traditional department store was the dominant player in the American retail industry in the first half of the 20th century, which was designed to provide a unique shopping experience for consumers. However, only 50 years later, this mainstay of retail world was experiencing declining sales and serious questions were being raised as to whether its demise was imminent. Firstly, this case gives us a brief introduction of Macy’s, which is consolidated by 15 regional department stores with 810 store locations across the country. The company repositioned the consolidated Macy’s in the overall retail landscape in an attempt to differentiate the new company from its competitors. Secondly, the case provides a situation analysis of the factors Macy’s is facing, which includes the general economic environment, industry (product and services and segments), competition and consumers. Last but not the least, the case details not only Macy’s 2005-2006 consolidation and repositioning strategy but also Macy’s 2006-2011 post-consolidation. Questions 1. Complete a situation analysis of the traditional department store industry and of Macy’s as of 2005. Which factors in the external environment could (positively or negatively) affect the success of Macy’s new strategy? Which internal factors could affect the success of the company’s strategy? I think the following external environment factors could affect the success...
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...External Analysis for Macy’s Departmental Stores Inc. Introduction Macy’s Department Stores Incorporated or Macy’s is an American based retail chain of departmental stores. It is currently operating under two brand names the Macy’s and Bloomingdale in over forty five states of America. The company specializes in the range of products including jewelry, furniture, house hold items, footwear, clothing and other related items.It also offers online shipping services to the clients in large numbers of countries. The company currently operates in four business segments including Macy’s, macy.com, Bloomingdale’s and Bloomingdales.com (one source, 2011). The company’s stocks are listed in the New York Stock Exchange under the symbol M (Macy’s Inc, 2011). The current market capital of the company is over thirteen billion US dollars and holds second position while Kohl’s Corporation has over sixteen billion US dollars market capital holding first position in the markets (NYSE:M, 2011). SWOT Analysis SWOT Matrix Strengths • Market position • Business operations • ecommerce Weaknesses • Legal issues • Geographic concentration Opportunities • Business expansion • Expanded product lines • mergers Threats • Competition • Regulations • Economic conditions Strengths Macy’s Inc. is among the largest retail outlets operating in the United States that deals in the diverse range of products like apparel, households, jewelry etc. The...
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