Shownotes
In the latest edition of Omni Talk’s Retail Fast Five, sponsored by the A&M Consumer and Retail Group, Mirakl, Simbe, Ocampo Capital and Scratch Event DJs Chris Walton and Anne Mezzenga discuss: Macy’s Announcing Store Closures
For the full episode head here: https://youtu.be/MHY9wOkZ0LI
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Transcripts
All right, Chris.
Speaker A:Macy's last Thursday revealed that the revealed the first 66 locations that it plans to close as part of its plans announced nearly a year ago to shutter about 150 stores.
Speaker A:According to Retail Dive.
Speaker A:The 66 locations span 22 states and many are mall anchor locations.
Speaker A:Several are also standalone furniture stores that in some cases will shift operations to nearby full line stores.
Speaker A: land at openings announced in: Speaker A:Six out of the nine of the retailers freestanding off price backstage locations will also close.
Speaker A:Chris, are you surprised at all by the details surrounding Macy's store closure news?
Speaker A:I think I might know the answer to this.
Speaker B:Yeah, I think I am.
Speaker B:I am somewhat surprised.
Speaker B:Yeah, I'm not, I'm not, I'm like, I'm not like on the shocked level.
Speaker B:Like if 1 through 10 with 10 was shocked, I'm probably like a 5 here.
Speaker B:Like I'm surprised that this is what they're saying because particularly that it looks like it's in a, it's an about face on their small format stores, you know, and like it's 100% about face.
Speaker B:And, and I think, I think that about face is important to call out for two reasons.
Speaker B:First, we visited these stores in Texas, I think one of which is closing now if I'm not mistaken from reading the article.
Speaker B:And we were not impressed.
Speaker B:In fact, I think my joke at the end of that video tour was if it walks like a Macy's and quacks like a Macy's, it's still a Macy's because.
Speaker B:And I still for the life of me can't understand why the world needs a scaled down Macy's.
Speaker B:I've just never bought into that idea.
Speaker B:So, so, so that's why I'm kind of not surprised by this.
Speaker A:Sure, sure.
Speaker B:Then two, and this is the more important point here.
Speaker B:It tells me that they don't have a new path to growth upon which they can rely with any great certainty right now.
Speaker B:And that is, that is freaking scary.
Speaker B:I think everything they've been telling the media and the analyst community could soon blow up in their face.
Speaker B:And while Macy's.
Speaker B:Here's the other point.
Speaker B:While Macy's is reporting supposedly good news about their bold new chapter strategy in their 50 stores.
Speaker B:Like I'm always skeptical when I hear about 50 store tests because the entire executive team is right around those.
Speaker B:The entire store operations team is right around those.
Speaker B:They're getting the resources to be successful.
Speaker B:Yeah, yeah.
Speaker B:They're going to work in the short term but at some time, at some point those types of pilots revert back to the mean.
Speaker B:And so that's why I'm just like, wow, I don't see you've got a lot here going on, Tony Spring.
Speaker B:And so I'm, I'm very skeptical again about your growth trajectory and whether department stores are still going to exist.
Speaker A:Yeah, it's like having 50 flagship stores.
Speaker A:Right?
Speaker B:It is.
Speaker B:I mean it is that, that's the thing.
Speaker B:If, if you know retail like we do, like yes, these are going to be successful because by crook or by nook or whatever the hell the expression is, Tony Spring going to make sure that's not right.
Speaker B:I know, but by hooker, by crook, that's what.
Speaker B:Yeah, right.
Speaker B:Tony Spring is going to make sure that these things work because his reputation depends on it.
Speaker B:Right.
Speaker B:So, so, so yeah.
Speaker B:So, I mean, I don't know.
Speaker A:But yeah, it diverts media attention.
Speaker A:It diverts media attention.
Speaker A:I mean, no, I, I guess my whole point is that I, I actually think this is the most sensible thing that they can do.
Speaker A:I mean, I think that what Tony Spring is doing is trimming the fat here.
Speaker A:Like this is just.
Speaker A:Macy's is making sensible move.
Speaker A:You got to, you got to start shutting some of these down because they're having a huge impact on the bottom line.
Speaker A:And you know, our sources that we've talked to at Macy's, you know, like, like it was mentioned in the article, like a lot of these malls are the only mace, like the only store that's still in a dead or dying mall and no one's going to come there.
Speaker A:There's no other reasons to get them there.
Speaker A:So it just doesn't make sense.
Speaker A:It's a bad experience because like I think you said in a conversation we were having here, like there's nobody that wants to work there.
Speaker A:Like it's just, it's, it's a bad experience.
Speaker A:It's sour with the brand immediately.
Speaker A:So I think there and it makes sense.
Speaker A:And you know, honestly Chris, I kind of give them kudos for shutting down these small format stores because I think a lot of other retailers would have kept, I think they would have tried to push it.
Speaker A:And you're 100% right.
Speaker A:Like small format Macy's.
Speaker A:I don't hate the idea but it can't just be Macy's shoved into a smaller box.
Speaker A:And I, that was the big problem for me was that there's a glut of inventory.
Speaker A:Like it just, it the, you know, the sales experiences weren't consistent.
Speaker A:Like, it just, it didn't make sense.
Speaker A:So I think I'm actually, I'm kind of impressed.
Speaker A:I'm going to give me a, give Tony Spring a little bit of a boost here and say like this is a very Amazon move of them.
Speaker A:Like, this isn't working.
Speaker A:We're cutting it out.
Speaker A:Even though we invested a bunch of money, we told everybody we were going to, this was our strategy.
Speaker A:Like we can't make money off the backstage stores.
Speaker A:The small format Macy's isn't working.
Speaker A:Like, they're going to have to try to course correct and make those tough decisions right now if they want to survive as a brand.
Speaker A:So, yeah, not surprised, I guess.
Speaker B:Yeah, you're right.
Speaker B:You're right.
Speaker B:It's kind of, it's probably a smart move, but it's not a move that makes me feel any better about the trajectory.
Speaker A:That's, that's, that's 100 agree.
Speaker A:Yeah, like there's, there's got to be more going.
Speaker A:I, I still, like, I think that there, you know, I really think that Macy's just needs to sit down, take a hard look at what, what the future of Macy's needs to be and then start acting on it and even, even start consolidating I think some of the larger Macy's footprints too, to, to really makes the most economical sense what the new customer wants.
Speaker B:It's interesting too because he came out yesterday and said, he said, I think on stage at nrf, even he said, like we believe in having three brands.
Speaker B:He doesn't want to spin them off.
Speaker B:You know, he wants it when, when.
Speaker B:And I actually think we've talked about before, but I think Bloomies as a smaller strategy makes a ton of sense.
Speaker B:But.
Speaker B:Yeah, but the other point I make too, and before we move on is we interviewed Joe Call, their head of assets protection and great guy, learned a ton.
Speaker B:So brilliant, great interview.
Speaker B:To hear his perspective, particularly on putting products behind glass was really interesting to listen to.
Speaker B:But the thing I got listening to him, I was just like, man, department stores are just so hard and so outdated.
Speaker B:You've got multiple entrances, you've got a guard, you've got split levels at most of these stores.
Speaker B:Like, it's just, it's just the, it's just kind of the dinosaur in a lot of ways.