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Efforts to Improve Macy’s Same-Store Sales Growth

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Goldman Sachs conference

At the Goldman Sachs Global Retailing Conference held on September 9, 2015, Macy’s (M) senior management discussed the company’s initiatives to improve its sales. Macy’s disappointed its investors with a decline in same-store sales growth in the first half of fiscal 2015.

In 2Q15 ended August 1, 2015, Macy’s same-store sales declined by 2.1% on an owned basis. Nordstrom (JWN), JCPenney (JCP), and Dillard’s (DDS) reported same-store sales growth of 4.9%, 4.1%, and 1%, respectively.

Macy’s, JCPenney, and Dillard’s together account for 0.3% of the portfolio holdings of the iShares Russell Mid-Cap Value ETF (IWS). Macy’s, Nordstrom, JCPenney and Dillard’s together constitute 1.2% of the holdings of the iShares U.S. Consumer Services ETF (IYC).

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Compelling merchandise

Macy’s is implementing several measures to increase store traffic and improve same-store sales. At the Goldman Sachs conference, Macy’s president Jeff Gennette spoke about how the company is offering in-trend merchandise like denim and activewear. The company is expanding its health and wellness platform beyond activewear to include new categories, accessories, and technology like Fitbit, which includes a line of activity trackers.

Macy’s has collaborated with Nike (NKE) to offer Nike Training Club. The facility was initially offered in three stores and is now extended to 60 locations. As part of its health and wellness platform, the company also expanded the availability of the in-demand blender Vitamix from its online and flagship stores to another 50 locations.

Macy’s is also attracting customers with brands designed by popular icons like Jessica Simpson and Betsey Johnson. The company is actively exploring trends for the upcoming season. For this fall, the company is positive on fringe, fur, capes, ponchos, duck boots, and fashion and active sneakers. Aside from stocking popular brands like Calvin Klein (PVH) and Polo Sport, the company is also offering exclusivity through brands like Heidi Klum Intimates.

President Gennette also spoke about a test pilot in the fine jewelry business that will be run in 40 stores in southern California. Macy’s same-store sales are likely to benefit from its focus on its top 150 stores, especially on the top 30 stores called platinum doors. The company is enhancing these stores’ visual merchandise and special events.

In August, Macy’s launched My Stylist@Macy’s free service, through which Macy’s associates help consumers choose merchandise based on the latest trends. The company’s expansion of its Bluemercury beauty business is also expected to positively impact its store traffic.

In the next part of this series, we’ll discuss the company’s efforts to enhance its online business.

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