No matter how bad things get for a retailer, its execs are supposed to put on a good face and spin the bad news into something positive. So it may say a lot about Macy’s that the best line its Chief Financial Officer could muster was “We’re not dead.”
It’s no secret that sales at Macy’s haven’t been great in recent memory, leading the department store chain to close dozens of stores, focus on its off-price brand, Backstage, and sell some of its real estate. It seem that those efforts haven’t quite paid off for the chain: Macy’s reported another round of declining sales Thursday.
Macy revealed its 2017 first quarter earnings, noting that comparable sales for stores open at least one year were down 5.2%. Total year-over-year sales were down 7.5%, but the company noted that some of that decline was related to store closures announced in 2016.
While it may not be surprising that Macy’s sales were down, the 5.2% decline was more than the 3% analysts had anticipated, the Wall Street Journal reports.
In the face of falling sales, Macy’s executives are not exactly doing a whiz-bang job of selling their confidence in the company’s future.
“Don’t count us out, we’re not dead,” Macy’s CFO Karen Hoguet told the Journal.
She says the retailer is looking toward the future by shifting its focus on its remaining stores.
As previously reported, Macy’s plans to implement new services, revamp store features, and revise coupons in a bid to bring in shoppers.
One such revamp has taken place in the store’s shoe department. Instead of offering a traditional shoe department where an employee runs to the back room to pick out requested shoes, some stores are turning to self-serve shoe departments, where boxes are located under shoe displays.
Tests of that revamp have resulted in a double-digit increase in shoe sales, the WSJ reports, adding that the new format is expected to be rolled out to all stores this summer.
In addition to concentrating on its current stores, Macy’s also plans to focus on the opening of its companion brands, beauty store Bluemercury and off-price discount store Backstage.
According the company’s earnings report, it opened 10 new freestanding Bluemercury stores in the first quarter and 11 Backstage locations.
CNBC reports that CEO Jeff Gennette said during the conference call that the retailer hopes to finalize a plan to increase its Backstage footprint further by the end of the year.
Increasing its off-price footprint appears to be an attempt to gain the attention of younger shoppers, as Gennette points out that 70% of millennials shop off-price each month.
Analysts tell CNBC that this strategy could pay off, as long as Macy’s does it the right way.
“There is no doubt that Backstage is a good concept and one that Macy’s should pursue, but we believe it is better suited to stand-alone locations in units where rents are cheaper,” Neil Saunders, managing director at GlobalData Retail, tells CNBC.