Two additional Backstage stores
Macy’s (M) will open two additional pilot off-price stores under the Macy’s Backstage name in metro New York City. According to a June 8 company press release, one of these pilot off-price stores will be opened in Fordham Place, the Bronx, New York. As well, an existing store at Essex Green Shopping Center, West Orange, New Jersey, will be remodeled in keeping with the Macy’s Backstage format.
Macy’s pilot stores
In early May, Macy’s first announced its plans to open four pilot Macy’s Backstage off-price stores at:
- Sheepshead Bay, Brooklyn, New York
- Queens Place, Elmhurst, New York
- Lake Success Shopping Center, New Hyde Park, New York
- Melville Mall, Huntington, New York
Macy’s stock price has appreciated by 6.8% since the initial announcement. All six Macy’s Backstage stores are expected to open in fall 2015.
The average Macy’s Backstage store will be ~30,000 square feet. The leading department store will hire between 30 and 40 associates for each Macy’s Backstage store.
Macy’s optimistic about off-price entry
Macy’s expanded its plan from four pilot off-price stores to six following positive feedback from customers after it initially announced it was entering the off-price space.
Department store sales at companies including Macy’s, Kohl’s (KSS), and JCPenney (JCP) have been sluggish in recent years due to intense competition from online retailers such as Amazon (AMZN) and off-price retailers such as TJX Companies (TJX) and Ross Stores (ROST).
As well as competing with established off-price retailers like TJX Companies, Macy’s Backstage will also be going up against the off-price stores of other department stores including Nordstrom (JWN) and Neiman Marcus.
Multiline retailers including Macy’s constitute ~6.2% of the Consumer Discretionary Select Sector SPDR Fund (XLY).