Part of Macy’s strategy to try to keep shoppers interested in its stores is to revamp its private labels, with the goal of offering customers something so unique they cannot find it anywhere else.
Walking through its turnaround plans with investors, the department store chain said Wednesday that it is on track for its private brands to make up 25% of sales by 2025.
And Macy’s said it will grow four of its “best” in-house brands — International Concepts, Alfani, Style & Co., and Charter Club — to be worth $1 billion each.
“We’re already well on our way,” Macy’s chief merchandising officer Patti Ongman told investors at the New York Stock Exchange. “Private brands are already among our highest margins, but we continue to find ways to improve. We’re building new sourcing and supply chain capabilities.”
This growth will be vital to Macy’s finding success and sales growth in the future, as more of the national brands that typically are found in its stores have been more vocal about their direct-to-consumer strategies. Nike, for example, has said it is focusing on key partners Foot Locker, Nordstrom and Dick’s Sporting Goods, but then is trying to sell more merchandise through its own stores and website.
Macy’s investor meeting followed its announcement Tuesday that it would be restructuring its business. The retailer plans to shut roughly 125 stores, mostly in weaker shopping malls, over the next three years.
As it does that, the company told investors Wednesday that it plans to invest savings in opening more of its off-price Backstage locations, while it tests a new smaller-format shop called Market by Macy’s. It also will freshen some of its merchandise in an attempt to try to reach more shoppers under 40 years old.
About a quarter of Macy’s sales come from its top national brands, such as Ralph Lauren and Calvin Klein, today.
Macy’s shares were last up nearly 5%, having fallen more than 30% over the past 12 months. The company has a market value of about $5.3 billion.