When will Macy's bring its discount shop here?

Posted at 4:38 PM, May 20, 2016
and last updated 2016-05-20 16:38:38-04

CINCINNATI - It “won’t be that long” before Macy’s Inc. brings its discount-retail format Backstage to Cincinnati, company officials said at Macy’s annual meeting Friday.

But it’s likely to be launched here as an in-store department instead of a freestanding store.

“We’re waiting to see how successful it is,” said Macy’s Chief Financial Officer Karen Hoguet. “Once we have decided that, we’ll roll it out pretty quickly.”

Backstage is an off-price retail format that Macy’s introduced in New York and is now testing with six freestanding stores and six in-store departments.

Macy’s CEO Terry Lundgren said it’s part of a broader strategy to build up store traffic with new merchandise, better marketing and new events that he wants to expand as quickly as possible.

“Anything we can do to help the mall and help ourselves create more trips to come into the store, we want all those ideas to be tried and tested,” he said.

Backstage is “an idea for less productive stores that creates more trips,” he added. “That idea we like very, very much.”

Macy’s has come under fire after posting its fifth consecutive quarter of declining comparable-store sales earlier this month. Lundgren told shareholders the company will enjoy a comeback in the second half of this year as growth initiatives take hold.

Many of those growth ideas are aimed at steering more shoppers into Macy’s stores with electronics from Best Buy, tuxedos from Men’s Wearhouse and cosmetics from Bluemercury, the online retail that Macy’s acquired in 2015. Bluemercury opened a 1,000-square-foot store within a store at Kenwood this week, one of 115 expected to open by 2017.

“It’s spectacular,” Lundgren said. “To me, it’s ideal ... the right size, buzzing, busy. No advertising. We’re very pleased and we’re getting better each time that we do one.”

Hoguet said the Kenwood Bluemercury is an example of how Macy’s is shifting to services and experiences as a way to generate in-store traffic.

“We’ve put what we call X-Bars in these stores where you can get 10-minute services,” she said. The idea is designed to give shoppers a quick boost when they don’t have time for a one-hour spa treatment.

“People are less inclined to want to do it back in a room,” Hoguet said. “They want to do it just on the selling floor and boom, be done. So, we’re testing that too.”

At the Easton Town Center near Columbus, Macy’s is developing a health and wellness concept that will offer services or in-store experiences around the merchandise it already sells, including active apparel, nutriblenders, skin care products and mattresses.

“We’ve had these yoga classes in our stores,” Lundgren said. “We’ve had 1,500 people in Herald Square’s lower level at 6 o'clock in the morning. They come in the store as sort of a club. So, how do we take advantage of these things?”

Another idea is expanding the flower show that Macy’s has offered for decades in New York around the Easter holiday.

“We did it in five stores” this year, Lundgren said. “How do we do a mini-version of that in 105 stores? How do we curate in a way that it becomes like a museum, where you have a headset and go through and learn about the various foliage and flower patterns and where they’re from?”

Lundgren said the shift toward experiences may be a cyclical trend that fades when sales growth returns. But elements of it may be baked in the retail scene.

“We’re trying to figure out what is permanent and what is cyclical,” he said. “Is this move toward experiences permanent or not? It’s impossible to say, but it’s certainly evident in buying habits today.”