Macy’s products assortment
Macy’s, Inc.’s (M) merchandise includes apparel and accessories for men, women, and kids as well as cosmetics and home furnishings. Macy’s and other department stores such as Kohl’s Corporation (KSS), J.C. Penney Company, Inc. (JCP), Sears Holdings Corp. (SHLD), and Nordstrom, Inc. (JWN) belong to the consumer discretionary sector. The Consumer Discretionary Select Sector SPDR Fund (XLY) and the First Trust Consumer Discretionary AlphaDEX Fund (FXD) held about 1.03% and 0.77% in Macy’s, respectively, as of January 30, 2015.
Macy’s major revenue source
In fiscal 2013, female accessories, intimate apparel, shoes, and cosmetics contributed 38% of Macy’s revenues, followed by female apparel, which accounted for 23%. The men’s and children’s segment accounted for 23% of revenues. Home or miscellaneous products accounted for 16% of fiscal 2013 revenues.
Macy’s derives the majority of its revenues from third-party brands such as Jimmy Choo, Armani, Burberry, Chanel, Christian Dior, David Yurman, Gucci, Louis Vuitton, Polo Ralph Lauren, Michael Kors, Calvin Klein, Tommy Hilfiger, and INC.
In addition to third-party brands, Macy’s sells private label brands, which include certain licensed brands. These private label brands include Maison Jules, Alfani, Aqua, Bar III, Charter Club, Club Room, Epic Threads, first impressions, Giani Bernini, greendog, Greg Norman for Tasso Elba, Home Design, Hudson Park, Ideology and Studio Silver. In fiscal 2013, Macy’s private label brands accounted for 20% of net sales in the Macy’s branded stores.
Macy’s private label brands are available only in Macy’s stores and differentiate the company’s product assortment from its peers. Some of the company’s private brands are targeted specifically at certain demographics such as Millennials. The next part of this series discusses this aspect in more detail.