Macy's Inc. (M) takes a bite of the Apple

Apple Watch in 180 stores by Christmas
Posted at 1:41 PM, Sep 08, 2016
and last updated 2016-09-08 13:42:59-04

CINCINNATI - Macy’s Inc. has inked a deal to sell the Apple Watch in more than 180 stores and become the first U.S. department store chain to offer an Apple store within a store at Herald Square in New York.

“It will be in all of our top buildings for the holiday season,” Macy’s CEO Jeffrey Gennette told Wall Street analysts Thursday.  “That will be an adjunct to a fashion watch business and particularly wearable-tech category that is important” to Macy’s future growth.

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The deal lets Macy’s sell Apple Watch Series 1 and 2 products as well as Apple Watch Nike+. The Apple Shop at Herald Square store will offer a wider selection of Apple products, including iPhone, iPad, MacBook and accessories.

Macy’s has been expanding its use of licensed departments within its stores to offer new product lines and generate more traffic. In recent years, Macy’s has signed licensing deals with Lenscrafters for eyewear, Finish Line for athletic shoes, LIDS Sports Group for clothing tied to pro sports teams, Best Buy for electronics and Starbucks for coffee.

“Tuxedo is a big one,” Genette told analysts at the Goldman Sachs Global Retailing Conference. “That was a big callout from our stores. We debated whether or not we could do that ourselves. We decided to go with the industry leader with Men's Wearhouse.”

Gennette said Macy’s is trying to develop technology centers in its stores that can offer electronics and wearable-technology devices like Fitbit and Apple watches without requiring its buyers negotiate deals that enable these products to be sold at a profit.

“It's not a good economic model for us to own and operate, but is it for others who can partner with us,” he said. “We always look at the categories that are wanted by customers, and as a department store, we can expand and tend to include them. And now, we have multiple economic models that can help us get there.”