IN-STORE SCORE: Macy's Will Debut A New Apple Store Next Month

With new iPhones and Apple Watches on the way comes the news that Macy's will open Apple's first full in-store shop at its Herald Square flagship next month. While 180 additional Macy's locations will be selling Apple Watches, this will be the tech behemoth's first in-store shop inside a U.S. Department store, and it will also carry iPhones, iPads MacBooks as well as other items and accessories for a more complete brand presentation. According to WWD, the shop will be set up on the main floor of the store's Broadway side which is devoted to makeup and accessories including in-store boutiques from Gucci, Louis Vuitton and Burberry. While Macy's Herald Square is known to have several leased in-store departments like Vuitton and Gucci, it is unclear at the moment whether the new shop will be operated by Apple or Macy's itself, but it could serve as a test for similar arrangements in other prominent flagship locations in the chain such as Chicago or San Francisco, or perhaps as a model to be adopted by other retailers as well. In recent months, Macy's has been struggling to right-size its sprawling fleet of stores cobbled together from several different department store chains as the result of a series of mergers over the past couple of decades. The luster from Apple's desirable product offerings may help the chain to attract new customers as it tightens up its retail footprint.

(WWD)

RETAIL RENEWAL: Have A Look At The Long Overdue Renovation For Macy's Brooklyn Store

Rendering: FRCH Design Worldwide

A few renderings have appeared for the radical $100 million renovation currently underway at the long neglected Fulton Street Macy's store in Brooklyn.
The former A&S flagship had been essentially left to languish in creeping decrepitude until on-and-off plans for a refurbishment were announced around the same time that dramatic renovations were fully unveiled at the mammoth Macy's Herald Square store. Finally, a scheme was revealed to shrink the Brooklyn store to a still sizable five selling floors including the basement and to turn the upper floors into office space. A glimpse of what this will look like is now out there. The renovation is being undertaken by FRCH Design Worldwide and includes new steel and glass awnings over the entrances on Fulton Street outside (pictured above) and a more extensive redesign on the inside. As at Herald Square, old, dingy ecru-colored walls will be transformed to sleek optic white, presumably with modernized lighting to create a brighter interior with HD video screens lining a refreshed escalator atrium (below). It's hard to tell which floor we are looking at in the rendering or how much, if any, of the remaining historic art-deco detailing of the main floor will be preserved, including a lavish elevator bay in the center of the main floor that may just hold more elevators than the newly reconfigured store will need. Last time we passed through, renovations were well underway, and however it turns out, it can only be an improvement for the store which in recent years has found itself in the backyard of some of Brooklyn's increasingly affluent neighborhoods. Eventually, it will be in a position to better serve those potential customers, and help continue to upgrade the Fulton Street shopping corridor.

Details, renderings of Macy’s DoBro overhaul unveiled (The Real Deal)

Rendering: FRCH Design Worldwide

COURSE CORRECTION BLOODBATH: Macy's Is Closing 40 Stores & Planning Off-Price Outlets Inside Existing Stores

Is it really such a big deal to close 40 stores if you have 773 of them?
Maybe not. After all, it's less than 10% of the Macy's store count, but it just goes to show that the kind of course correction that might be seen as relatively innocuous for another company becomes an event of a completely different scale when you are the 800 (or possibly 773) pound gorilla of the department store industry.
In fact, 40 stores is substantially bigger than most of the regional chains that have been absorbed over the years by what is now known as Macy's Inc. The mega-chain didn't get that big organically. It is the result of individual acquisitions like the Bamburger's chain once well expanded through the Mid-Atlantic region, but more importantly mergers with larger consolidated retailers that operated many individual nameplates. The current chain includes the remnants of former retail giants Allied Stores, Federated Department Stores and May Company which have ultimately put Macy's in every major market in America.
One could argue that despite pruning its fleet less dramatically over the years, those mergers and acquisitions have still left Macy's over-stored. In many cases acquired stores in the same mall as an existing location have been converted to separate Home or Menswear units and in at least one case, Tyson's Corner Virginia, there are two full Macy's stores literally across the street from each other in competing malls. Both of those stores are remaining open, a testament to the strength of that particular market where elsewhere it would be clearly redundant.
Three to four sales jobs will be cut from each of Macy's existing stores —which doesn't do much to respond to the recurring complaint that it is hard to find a salesperson in Macy's. That will still be a whopping loss of about 3,000 jobs. In addition only about 30% of retiring or voluntarily departing senior executives will be replaced, and about 600 back office jobs will be eliminated with 450 of those workers being laid off permanently rather than reassigned within the company. The total job loss is expected to be about 3,500 positions.
All of this is a response to a 4.7% decide in sales over the past few months which was higher than predicted. It is almost certain that the extremely unseasonably warm weather in most of the United States over the Fall season has contributed to the drop.
“In light of our disappointing 2015 sales and earnings performance, we are making adjustments to become more efficient and productive in our operations," says Macy's Chairman and CEO Terry J. Lundgren in a press release issued yesterday outlining the chain's strategy, "Moreover, we believe we can operate more effectively with an organization that is flatter and more agile so we can pursue growth and regain market share in our core Macy’s and Bloomingdale’s omnichannel businesses faster and with more intensity."
It's not all grim news, however. Three new Macy's stores and Two Bloomingdale's branches are set to open by Fall 2018, but more interestingly, the Macy's Backstage format, a budding off-price chain meant to compete with Nordstrom Rack, Saks Off-5th and the like, is set to grow with 50 new units, most of which will be opening within existing Macy's stores rather than as freestanding entities.
We remind ourselves that 50 stores is only a fraction of the 733 stores that will remain after the store culling, but it means that an off-price or clearance department will become a permanent fixture in some of the chain's full-line stores. What will this be like, and how will it affect the chain's full-price selling and its typically heavy promotional activity? Also unknown is how the chain's key vendors will feel about having to compete with discounted merchandise in the same store that normally would have been diverted to other channels after seasonal clearance sales. That will be very interesting to see unfold as, traditionally, most other chains have chosen to at least keep their outlet stores in separate buildings, though they have been losing in on their full-line mothership locations in recent years. We are reminded that Filene's Basement began literally in the basement of the flagship Filene's department store in Downtown Boston. Though it was eventually spun off into a separate company, it ultimately lasted longer than its namesake progenitor. Do we dare draw comparisons?

Macy’s, Inc. Outlines Cost Efficiency Initiatives and Lists Store Locations to Be Closed (Press Release)

RENOVATION ANTICIPATION: Macy's Announces New Renovation Plan For Historic Brooklyn Flagship

The fate of the lumbering behemoth known as Macy's in Brooklyn has been decided, and while the store will stay put, it will be both shrunken and dramatically overhauled.
Over the past couple of years, the Shophound has been following the state of the huge and historic but woefully out of date Macy's store in Downtown Brooklyn. The centerpiece of a renewed Fulton Street shopping corridor, the enormous nine-floor store is one of the largest in the chain, but has failed to keep up with both the newer influx of retailers to the area and the increasingly affluent population inhabiting the Boerum Hill, Cobble Hill and Carroll Gardens neighborhoods that are literally in its backyard. About a year ago, Macy's officials announced a long overdue renovation for the neglected store, which began its life in 1865 as the Abraham & Straus flagship, that would renovate it from top to bottom. Surprisingly, the plan was put on hold a scant few weeks later as the store began to explore other real estate options for the valuable site including a possible sale or redevelopment of the building and a move to a smaller site nearby. The newly updated plan will include a combination of several options. Yesterday, Macy's CEO Terry Lundgren revealed a scheme that will shrink the floor from its current nine floors to the first four levels plus the basement. The upper floors will be sold to real estate developer Tishman Speyer for $170 million who will also cover the costs of the renovation below with another $100 million over the next three years.
While it sounds like the store will be substantially reduced in size, it will actually only go from 378,000 square feet of selling space on nine floors to 310,000 square feet on five. Upgrades are said to include uncovering windows to allow more light as well as renovated bathrooms, escalators and elevators along with a general refurbishment of the of the space. A walk through the store today would reveal an ungainly patchwork of poorly sequenced departments as well as an ill advised mezzanine level on half of the main floor that creates cramped shopping spaces and obscures parts of the building's original architecture. However, a closer look reveals striking Art Deco architectural details like a lavishly decorated bank of elevators at the store's center (pictured below) and carved marble frieze work framing the main entrances on Fulton and Livingston Streets (pictured above). Ultimately, it will be a few years before we see the results of the renovation, but given the store's rapidly gentrifying locale, the opportunity for a freshly made-over Macy's in Brooklyn to do big business is huge.

Macy's will spend $100 million making over outdated downtown Brooklyn store (Crain's)
Previously:
Retail Renewal on Hold: Macy's Brooklyn Renovation Might Be Off Because...Real Estate

POLITICAL FALLOUT: Macy's Officially Dumps Trump

We were pretty sure that this was a decision that had to be made quickly, and it was. Following on the heels of

A selection of Donald Trump merchandise available as of yesterday at Macys.com

NBCUniversal, Univision and several other companies, Macy's Inc. has dropped Donald Trump merchandise from its 789 stores.
A statement released today reads:

“Macy’s is a company that stands for diversity and inclusion. We have no tolerance for discrimination in any form. We welcome all customers, and respect for the dignity of all people is a cornerstone of our culture. We are disappointed and distressed by recent remarks about immigrants from Mexico. We do not believe the disparaging characterizations portray an accurate picture of the many Mexicans, Mexican Americans and Latinos who have made so many valuable contributions to the success of our nation. In light of statements made by Donald Trump, which are inconsistent with Macy’s values, we have decided to discontinue our business relationship with Mr. Trump and will phase-out the Trump men’s wear collection, which has been sold at Macy’s since 2004.”

This comes in the wake of a moveon.org petition that garnered over 7000,000 signatures in a few days protesting the real estate mogul and declared presidential candidate's statements about Mexican immigrants earlier this month while announcing his candidacy. His characterization of them as drug-ridden criminals and rapists incensed many in the media world and caused Univision to drop the Miss USA and Miss Universe pageants and NBCUniversal to also cancel the pageants as well as sever all other ties with him, effectively banning him from returning to The Celebrity Apprentice reality show should he not get elected to the highest office in America.

Macy's has sold Trump branded merchandise for about 10 years, and often used him as a spokesperson for the store most prominently in TV adds along with Martha Stewart, Tommy Hilfiger, Sean "P.Diddy" Combs and other designers and celebrities whose product lines the store carries exclusively. The most recent such personality is Mexican singer and actress Thalía, whose collections launched at the chain earlier this year in an effort to invite more Latino customers to shop at Macy's. That would, of course, be at odds with showcasing Trump's merchandise, especially as the list of companies and celebrities distancing themselves from him grows longer. WWD describes Tump and Macy's CEO Terry Lundgren as "golf buddies", and notes that Macy's has also been a supporter of the Ice Skating in Harlem program for young girls, which holds an annual benefit at Trump (formerly Wollman) Rink in Central Park. There's no word whether or not that sponsorship will continue. At this point, Donald Trump's theory that his business experience makes him a good choice for president seems only to be proving that, at least at a consumer level, politics and business are better off staying as far away from each other as possible.

Macy’s Dumps Trump as Firestorm Over Comments Grows (WWD)
Previously,
Political Minefield: Macy's Under Pressure To Sever Ties (And Shirts And Suits) With Donald Trump

POLITICAL MINEFIELD: Macy's Under Pressure To Sever Ties (And Shirts And Suits) With Donald Trump

And the shoe is on the other foot.
Will Donald Trump's retail partners now give him the boot as well?
Yesterday, Donald Trump who has reveled in dismissing contestants from his reality show "The Apprentice" with a curt "You're Fired!" got a taste of his own medicine when NBCUniversal announced that it would no longer air the Miss USA and Miss Universe pageants which they both co-own, and end its relationship with him altogether. Initially, Spanish-language network Univision announced that it would drop the pageants in response to Trump's comments about Mexican immigrants in his speech earlier in June announcing his candidacy for the presidency. He referred to them as mostly criminals and rapists which incensed not just Mexican but many other immigrant communities from Latin America and beyond. Now that NBC has followed suit by ending its association with the real estate mogul, who had already announced he would not be hosting upcoming seasons of "The Apprentice" while he campaigns for President, attention turns to Macy's which sells men's tailored clothing, furnishings (pictured above) and home items under the Donald J. Trump and Trump Home labels as well as his fragrance called Success. WWD reports that a moveon.org petition garnered over 700,000 signatures on Monday, pressuring the store to dump Trump's brands which it carries exclusively. Trump's anti-Mexican screed has put Macy's at odds with its efforts to target Hispanic customers including a huge private brand launch earlier this year featuring Thalia, the Mexican singer and telenovela star. Macy's may be weighing its potential Thalia business against its current Trump business right now, because in classic fashion Trump has remained unapologetic about his statements, instead choosing to slam Univision and NBCU for dismissing him and his productions. Will Macy's be next in line for Trump's retaliatory vitriol? Time will tell, but this issue seems to be gaining traction rather than blowing over as the typically self congratulatory businessman discovers that being a general jerk gets taken very differently once you officially put yourself forth as a candidate for President.

Group Calls for Macy’s to Drop Trump Brand (WWD)

SPRING TRADITIONS: The Time To Visit Macy's Herald Square Is Right Now When It Is Full Of Flowers

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It is true that for a lot of New Yorkers, Macy's Herald Square, the city's most famous retail landmark, is generally to be avoided at all costs. It is the city resident's natural aversion to attractions that are bound to be clogged with slack-jawed tourists, and Macy's remains one of New York's top attractions for visitors.
However, the immense store's ongoing renovations have made the once dingy store brighter, more pleasant and easier to shop despite all the tourists, and if you ever plan to venture to the World's Largest Store, go before the end of next week when it is stuffed with lushly arranged flowers. Yes, it's time for Macy's Flower Show. For over 40 years, the store has heralded the arrival of Spring by festooning the main floor with blooming blossoms and greenery, and now that the main floor has been upgraded and refreshed it looks all the better as a temporary botanical garden. In addition, the store offers all kinds of workshops and special events.
Still need a reason?
Spring. Flowers.
It's actually Spring right now, even though we can hardly tell. After yet another dreary, seemingly endless winter, we could all do with a taste of warmer months to come, so it's worth a little detour to Herald Square even if it's just for a few moments to lift your winter-numbed spirits.

Macy's Flower Show Through April 4 at Herald Square, Midtown

ACQUISITION ALERT: Bluemercury Bought By Macy's

In the general scheme of things, it's a smallish deal that could mean big things in the cosmetics industry. Yesterday afternoon Macy's announced that it had purchased exclusive beauty boutique chain Bluemercury for $210 million. The Washington DC-based beauty retailer consists of 60 stores across 18 states including six in New York City with a seventh on the way in Chelsea. The chain's current founders and CEO's will remain in place as the chain is to be run as a separate, standalone entity from the Macy's and Bloomingdale's chains, but the immense corporate backing of its new parent will now fuel the company's rapid expansion.

Industry watchers have compared the up and coming Bluemercury to the still growing beauty behemoth Sephora, whose growth spurt happened after it was acquired by luxury giant LVMH. That's not a totally accurate comparison. Though there is some crossover, Sephora stores, as they are today, tend to center around upscale but widely distributed cosmetics brands and extensive fragrance offerings, while Bluemercury's feature high end treatment lines and more exclusive makeup lines, often with spas attached. A better comparison might be England's Space NK, whose U.S. stores are mostly leased shops within Bloomingdale's locations along with just a handful of freestanding units. In its current state, Bluemercury is not the Sephora-killer that many journalists are breathlessly heralding, but it may just be a threat to Space NK, whose U.S. business is heavily dependent on leasing space within a chain that has just become a sibling to its main competitor. How that will shake out remains to be seen over the next few years. Macy's doesn't really do small, so whether Bluemercury will be transformed into a major threat to Sephora or build up its own somewhat different, more luxurious niche is the question of the moment.

Macy's snaps up beauty brand Bluemercury (Crain's)

RETAIL RENEWAL ON HOLD: Macy's Brooklyn Renovation Might Be Off Because...Real Estate

Almost a year ago to the day, The Shophound took a jaunt down to a store we would ordinarily not have gone out of our way to visit, the Macy's flagship store in Brooklyn (pictured above).We were curious to compare state of the city's other sizable Macy's to the lavish renovations that were happening in the mother ship at Herald Square. What we found was a dingy mess of a store, but one that inhabited a historic Art Deco structure that still had some elegant bones that could have been unearthed and polished. The potential for a thoughtful, transformative renovation was high, especially since the store was well situated on a resurgent Fulton Mall and only blocks a way from Boerum Hill, Cobble Hill and Carroll Gardens —what is now one of the borough's most affluent areas. About six months later, Macy's announced that indeed they were planning to refurbish the Brooklyn store to take advantage of those very things, but now WWD is reporting that the planned renovations are on hold, and may never happen. In fact, real estate in that section of Brooklyn is now so valuable ($300 - $400 per square foot) that Macys could stand to make $300 million by selling the historic building at 422 Fulton Street, demolishing it and redeveloping the site to include a new residential tower which would feature a smaller, more productive brance of Macy's on its first few floors, not unlike the the Nordstrom tower currently under construction in Manhattan. No officials from either Macy's or potential developing partners had any comments for WWD, but its sources point out that the existing building, which was originally the Abraham & Straus flagship before it was absorbed into the Macy's chain in the 1990s, is actually a combination of a few buildings with inconsistent floor plates and levels that don't line up easily from floor to floor. A proper renovation would likely be extra costly even by New York retail standards, so the idea of having a more efficient, newly built store that was "right sized" for the neighborhood would be very attractive to practical minded Macy's executives.

Of course, there is also potential in revitalizing a historic building. In its current, dingy state, Macy's Brooklyn is not attractive to the upscale communities in its backyard, but a real re-imagining of the store could unlock a valuable customer base nearby that could justify the store's large size, particularly in kitchen, bed, bath and other home goods departments that aren's as well represented in the area. That would be a nice thing for fans of historic department stores to imagine, but given the current manic character of New York real estate development and its insatiable appetite for glittering luxury towers, the demolition option seems more likely at the moment. While no firm announcements about the store's future have been made, anyone with any affection for the city's grand, old retail palaces —even the ones which aren't terribly well maintained— may want to take a visit to Macy's Brooklyn flagship. it may not be there for much longer.

Macy's Rethinking Brooklyn Unit's Future (WWD)
Previously:
What Does The Macy's Renovation Mean For The Rest Of The Chain? (7.17.2013)
Macy's Plans An Overhaul For Brooklyn (1.24.2014)

COLLABORATION ANTICIPATION: Zooey Deschanel Enters The Celebrity Fashion Fray With Tommy Hilfiger

Expect to see a lot of blue doe eyes under a heavy raven-haired fringe on bus shelters and subway ads this Spring as Tommy Hilfiger launches a collaboration capsule collection with actress Zooey Deschanel called To Tommy From Zooey.The first pieces of the 16-piece dress collection will arrive at Macy's stores (where Hilfiger has an exclusive agreement) on April 14th, and then a week later at the designer's own stores and on Tommy.com. Few actresses have as well defined of a personal style as the "New Girl" star. Her own vintage styles with a mod, 1960s flair inspire the line (see sketch at right). “I am a fashion fanatic, and I am always looking for new ways to incorporate vintage, feminine pieces into my own wardrobe,” the actress has officially stated. For his part, Tommy calls Deschanel, "very bright and very funny, and really down to earth, the girl next door. At the same time, she has a Jackie O type of chicness to her.” You won't have to be Jackie O to buy the collection, however, which will retail from $98 to $199. Both parties are mum on whether this will be a one-shot deal or an ongoing collaboration, but after a mini-media blitz including print, digital and outdoor advertising, we should how well Deschanel's signature, whimsical style translates into fashion. Have a look at some of Carter Smith's advertising images in the gallery below.

Zooey Deschanel Teams With Tommy Hilfiger (WWD)

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