What: Macy’s is making adjustments to its business model and marketing organization to evolve with customers who are increasingly changing the way they shop across stores, desktops, tablets and smartphones. As part of the realignment of the organization, Maria Cristina Rios, Director of Multicultural Media Strategy will shift to the role of Director, Consumer Segments – Multicultural.The responsibility of multicultural media strategy will shift to Linda Tran, Director of Magazine & Multicultural Media Strategy.
Why it matters: These changes include merchandising and marketing restructuring to reflect a single omnichannel view of the business. As well as in-store and field organization adjustments supporting M.O.M. strategies.Workforce will be increased in some functions and locations.Oversall, the adjustments are expected to generate savings of approximately US$140 million per year, beginning in 2015.
Macy’s, Inc. has announced a series of initiatives to evolve its business model and invest in continued growth opportunities as consumers change the way they shop.
Actions include a restructuring of merchandising and marketing functions at Macy’s and Bloomingdale’s consistent with the company’s omnichannel approach to retailing, as well as a series of adjustments to its field and store operations to increase productivity and efficiency. As part of the realignment of the organization, Maria Cristina Rios, Director of Multicultural Media Strategy will shift to the role of Director, Consumer Segments – Multicultural. Her role will solely focus on creating strategies to retain and attract new multicultural customers and will report into Customer Analytics.The responsibility of multicultural media strategy will shift to Linda Tran, Director of Magazine & Multicultural Media Strategy. Tamara Weston, National Multicultural Marketing Manager, will stay in media in her current role and will now report to Linda Tran as a part of the new structure effective as of February 9.
Restructuring in Merchandising/Marketing
Both Macy’s and Bloomingdale’s are restructuring their respective central merchandising and marketing functions so each brand can develop and present its assortments seamlessly across channels and provide a single omnichannel view in all product categories. Going forward, one unified merchandising and marketing organization – a hybrid of store and online buying – will support the entire Macy’s business to encourage both store and digital growth. The same is true at Bloomingdale’s.
These changes support continued growth and an enhanced shopping experience online and via mobile, as well as in stores.
Simultaneously, Macy’s will make selected changes to its merchandising-related functions in local districts (administrative grouping of Macy’s stores) around the country. The company will discontinue district planner positions and reinvest in new regional teams devoted to specific themes of merchandise localization. These changes in merchandising and marketing are expected to affect approximately 115 associates in Macy’s and Bloomingdale’s central offices in New York City, as well as about 150 associates in local markets nationwide.
Adjustments in Stores/Field
An average of two to three associates will be affected in each of Macy’s and Bloomingdale’s approximately 830 stores (out of an average workforce of approximately 150 associates in each store), for a total of about 2,200 affected associates nationwide. The company is working to place as many affected associates as possible in other open positions.
Also, two existing Macy’s stores districts are being merged into nearby districts – thus reducing the ongoing number of stores districts to 58 from the current 60.
With the changes announced, Macy’s, Inc. will be increasing its workforce in some functions and locations while decreasing in others. In total, the Macy’s, Inc. workforce is expected to remain at a level of approximately 175,000 associates.
“Our business is rapidly evolving in response to changes in the way customers are shopping across stores, desktops, tablets and smartphones,” said Terry J. Lundgren, Macy’s chairman and chief executive officer.“Macy’s, Inc. has benefitted in recent years by having invested early and aggressively in our M.O.M. strategies (My Macy’s localization, Omnichannel integration and Magic Selling customer engagement). This has included talent, technology, omnichannel infrastructure and fulfillment capability.We remain committed to M.O.M. as our strategic roadmap.,” added Lundgren.
Growth Investments Planned for 2015
The company will reinvest savings from merchandising, marketing, store and field initiatives. Plans include:
- Creating a team within the company to explore potential opportunities for a Macy’s off-price business. Continue progress in digital retailing, including further developing the technology, speed and customer experience of macys.com and bloomingdales.com as they are accessed via desktop, smartphones, tablets and apps.
- Advancements in business systems and information technology.
- Increasing direct-to-consumer fulfillment capacity in every Macy’s and Bloomingdale’s store and at the five existing dedicated fulfillment centers located in Arizona, California, Connecticut, Tennessee and West Virginia. In addition, as many as 1,500 new year-round and seasonal associates will be hired this year at a new 1.3 million-square-foot direct-to-consumer fulfillment center now being built in Tulsa County, OK.
- New stores to be opened in fall 2015, including a Macy’s in Ponce, PR, which will employ about 275 associates, as well as a new Bloomingdale’s in Honolulu, with an expected workforce of 250 associates.
Store Closings/Openings
Macy’s, Inc. also detailed a series of adjustments to its portfolio of stores across the country.
- A three-story Bloomingdale’s of 150,000 square feet will be added in an expansion of Westfield Valley Fair Shopping Center in San Jose, CA. The store is expected to open in fall 2017 and employ an estimated 250 associates.
- Macy’s will build a new 155,000-square-foot store on two levels to replace its existing 136,000-square-foot Westfield Century City location in Los Angeles, CA, expected to open in November 2016.
- New Macy’s stores will be opening in: o Plaza Del Caribe, Ponce, PR (150,000 square feet; to open in fall 2015; approximately 275 associates); o Ka Makana Ali’i, Kapolei, HI (103,000 square feet; to open in fall 2016; approximately 180 associates).o Mall at Miami Worldcenter, Miami, FL (195,000 square feet; to open in fall 2017; approximately150 associates).
- New Bloomingdale’s stores will be opening in: o Ala Moana, Honolulu, HI (167,000 square feet; to open in fall 2015; approximately 250 associates); o Mall at Miami Worldcenter, Miami, FL (120,000 square feet; to open in fall 2017; approximately 225 associates).
- New Macy’s and Bloomingdale’s stores are planned to open in Al Maryah Central in Abu Dhabi, United Arab Emirates, in 2018 under license agreements with Al Tayer Group.
- The company is also closing almost 14 Macy’s stores , being closed account for approximately US $130 million in annual sales, some ofwhich is expected to be retained in nearby stores and with online/mobile sales.Associates displaced by store closings may be offered positions in nearby stores where possible.
“In 2014, about US$1 billion of Macy’s and Bloomingdale’s directto-customer shipments originated from Macy’s and Bloomingdale’s stores. Moreover, our process for Buy Online Pickup in Store has established a new dimension in customer access and convenience,” Lundgren said. “We continue to maintain a very strong nationwide network of stores through an ongoing process of selectively adding new locations while also trimming those that no longer meet our performance requirements.”
Financial Impact
The changes announced are estimated to generate savings of approximately US$140 million per year, beginning in 2015. The company expects to reinvest savings into technology and growth initiatives, including those described above, as well as to offset higher expense expected in health care and retirement plans.
Macy’s, Inc., with corporate offices in Cincinnati and New York, is one of the nation’s premier retailers, with fiscal 2013 sales of US $27.931 billion. The company operates about 840 stores in 45 states, the District ofColumbia, Guam and Puerto Rico under the names of Macy’s and Bloomingdale’s, as well as the macys.com andbloomingdales.com websites.
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