CINCINNATI - For those who don’t think Macy’s Inc. is searching far and wide for ideas to reverse its nine-quarter sales slump, consider what CEO Jeffrey Gennette told the company’s shareholders in Cincinnati Friday.
Its new five-point “North Star” strategy was inspired by the forearm tattoo of company founder, R.H. Macy. The red star tattoo was “inspired by the North Star, which always guided him toward a more optimistic future,” Gennette explained. “From the beginning, Macy’s the man and Macy’s the store had a sense of exploration and willingness to push boundaries. Those same traits are evident today as we reinvent Macy’s once again.”
Macy’s stock is down 35 percent so far this year after two straight quarters of disappointing results. Macy’s Chairman and former CEO Terry Lundgren told a crowd of about 150 employees and shareholders that the company has “a very strong track record of coming back” from challenging times.
Gennette said the new North Star strategy “will guide all of our Macy’s brand stores” as restructures the company for future growth. It's an approach that was only shared internally before today.
Here’s how Gennette described the five points of the North Star strategy:
· From Familiar to Favorite, which means building on Macy’s reputation as a fashion leader and expanding customer loyalty with pricing and technology tools.
· It Must Be Macy’s means introducing new products and experiences in fashion and home goods that “our customers love and they can only find with us.”
· Every Experience Matters. That could include making it easier for customers to buy online and pick up in store. “Our competitive advantage is he ability to combine the human touch in our physical stores with cutting edge technology,” he said.
· Funding Our Future. Macy’s aims to save $550 million from cost-cutting initiatives announced in January, with $250 million to be invested in new growth initiatives.
· What’s New, What’s Next. That calls for new innovations to “turn customer and technology trends to our advantage and drive growth.”
The meeting included at least two votes of confidence from Macy’s shareholders, 95 percent of whom voted in favor of the company’s 2016 compensation plan. They also voted overwhelmingly in favor of Macy’s slate of directors.
Shareholder Jim McKay was the only person to pose a question at the meeting, asking – as he does every year – to bring back the Marshall Field name to Macy’s State Street store in Chicago. Gennette told him positive changes will come to that store, as Macy’s works on plans to sell and redevelop its long-vacant upper floors – but it will not include a name change.
McKay thanked Gennette and offered to provide a list of 12 reasons why Macy’s will recover from its current troubles.
“Some of these chains are going to go away but Macy’s will be a survivor,” he said.