Friday, January 9, 2015

Macy's Eyes Off-Price Opportunity

Off-price retailing is nothing new--Loehmann's, Hit or Miss, Marshall's all were in the business decades ago. Of course Marshall's is still going strong, now part of the booming TJX off-price empire that includes Home Goods and T.J. Maxx.

In recent years, Nordstrom and Saks Fifth Avenue have enjoyed considerable success with their Nordstrom Rack and Saks Off Fifth off-price stores, located in outlet malls and in lifestyle shopping centers. (Saks Off Fifth began as a chain of clearance stores for Saks merchandise and evolved into off-price over time.)

Now Macy's sees significant revenue opportunity in entering the off-price retail space. Its Bloomingdale's department store division has 13 off-price outlet stores, so Macy's has experience in the sector and can evaluate investment vs. profit potential.

Macy's has announced it will shutter 14 of its full-price department stores and open 2 new ones in 2015, as consumer behavior shifts toward online shopping and pursuit of value (meaning lower prices for quality merchandise). The company's possible off-price venture is in the very early planning stages.

Macy's has been an enthusiastic proponent of multichannel marketing. It's also highly social and mobile, with well over 14 million FB likes and 720,000 Twitter followers, plus participation in Apple Pay, among other mobile activities.

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