Discount stores

Macy’s “Backstage” discount stores to open soon to boost sales

Legendary Macy’s department store cuts nearly 5,000 jobs and closes 40 stores in 21 states after reporting disappointing holiday sales. Sales in November and December fell almost 5% from 2014.

Under pressure to sell real estate, Macy’s opened branches of its discount stores, “Macy’s Backstage”, inside their traditional stores in the hope of attracting customers.

“This is a search for relevance and foot traffic in the store,” CBS News financial contributor Mellody Hobson said Thursday on CBS This Morning. “The idea is that they’re going to put their Macy’s Backstage brand inside their traditional store and the value shopper who walks into the discount store will experience the traditional Macy’s.… That seems like a tall order to me. I could see the traditional Macy’s customer checking out the Backstage store, but they want to see it happen backwards. It’s going to be tough. “

10 best and worst deals at Macy's

10 best and worst deals at Macy’s

While other department stores like Nordstrom have also gotten into the bargain concept with its discount store, Hobson said Macy’s strategy is different. Nordstrom has strategically distinguished its discount store, Nordstrom Rack, ensuring that 80% of its merchandise is exclusive. In contrast, experts at Macy’s claim that 80% of Backstage offers will be the same as the main store.

Hobson also said Macy’s should “catch up” to competitors like Nordstrom, which has been doing so for about a decade and has more than 100 Rack stores. Currently, Macy’s only has eight Backstage stores and plans to develop a “handful” more.

According to Hobson, Nordstrom has also done a “very good job” implementing other strategies to stay competitive, such as attracting online retailers with its style service, “Trunk Club”, and building an “omnichannel business”. by being one of the first to authorize purchases over the phone.

But overall, department stores have taken a hard hit due to competition from online retailers as well as changing consumer habits, especially among millennials. Companies like Macy’s and Dillards have seen stock prices drop more than 45% from their 2015 highs.

“It’s just another day. They’re storming the internet and the millennial customer isn’t in the retail business in terms of buying clothes. They want experiential shopping like vacations and shopping. dinner, and that’s a lot to overcome, ”Hobson said.

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