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Macy's Goes Local

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Wasn't the whole point of the Federated/May merger, subsequent rebranding of stores as "Macy's" and changing the company's name to Macy's Inc. all about trying to create a national brand? Apparently, not anymore.

The changes are small so far. Macy's is bringing back men's suits from Hart Schaffner Marx to a few stores (Marshall Field's used to sell a lot of them) and intends to re-introduce Joseph Abboud suits in selected locations soon. It is also selling tuxedos again at the State Street flagship.

The steps are part of a pilot program in Chicago and a few other markets where the department store chain is attempting to customize its stores to local tastes after a two-year effort to "Macy-ize" the hundreds of regional department stores it bought in 2005.

The Chicago effort, only a few months along, is starting to show some initial "improved performance," Macy's Chief Financial Officer Karen Hoguet said in its earnings call on Wednesday. But the dire state of consumer spending has some analysts concerned that the endeavor is coming too late.

"The hope for the future at Macy's could indeed lie in its nascent 'localization' initiative," said bond analyst Carol Levenson at Chicago-based Gimme Credit in a Thursday report. "But before it gets from Point A to Point C, Macy's has to negotiate an increasingly tough consumer spending environment through this holiday season into next year."

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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