It's not a good day for retailers, with many reporting sales
and earnings slumps.
In its report this morning, Macy's appears to be hoping that they might at least look better than the competition.
"While a weakened economic environment led our industry to softer financial results than initially expected, Macy's, Inc. did outperform most of our primary competitors in the fourth quarter," said Terry Lundgren, chairman, president and CEO, in a statement. "We also generated significant cash flow despite weaker-than-expected sales trends. Going forward, we are aggressively pursuing our recently announced market localization initiative to drive future sales and earnings."
What's he talking about? Well, earlier this month, the brand announced that they would be consolidating their various Macy's regional divisions into three primary groups: Macy's East, Macy's West, and Macy's South. Within each of those divisions will be 20 "districts," each consisting of about 10 stores, governed by a new workforce of about 250 managers. The thought is that by having more management in more localized markets, the company will be able to make much more specific marketing appeals to its consumers, tailoring everything to their particularly tastes, whims, or geographic proclivities. Of course, that consolidation also includes the downsizing of some 2,550 jobs across the previous geo-divisions. More on that, here.
Oh, and also, Macy's announced that it will no longer be reporting same-store monthly sales figures, which, you know, are the clearest indicator of a retailer's performance inbetween earnings reports. Oh, and another thing, they're not going to be giving anymore estimates about sales and earnings for the future. That certainly sounds like an underwhelming vote of confidence in the company's ability to perform.
"In total, 2007 was a year of significant strategic progress," added Lundgren, in a statement. "We successfully launched exclusive new brands such as Martha Stewart Collection, invested for continued growth in the direct-to-consumer business, expanded Bloomingdale's, changed our corporate name, and launched a breakthrough new marketing approach under the umbrella of 'The Magic of Macy's'."
You probably remember that particular campaign from the holiday season, when you were besieged by a commercial with a melee of images of Donald Trump, Sean Combs, Martha Stewart (who almost seemed warm and whom we were also relieved to see unshackled from KMart), and mental eyesore Jessica Simpson hawking their products sold through the mega-retailer.
Lay your chips down, folks, we're betting on Martha as the sales driving leader in the full collection category this year. Hopefully, for Macy's she'll be "a good thing."
