Macy’s launch event for its new private brand, On 34th, also marked one of the first public appearances by Tony Spring (left) since he was named incoming CEO. Spring is CEO of the company’s higher-end department store chain, Bloomingdale’s. He will succeed Jeff Gennette (right) in February.
Melissa Repko | CNBC
NEW YORK — Macy’s, the 165-year-old department store chain, is looking for ways to keep up with the newer kids on the block.
The retailer faces slumping sales, and its stock has struggled in a good year for the market. Now, it’s banking on a wave of new and refreshed private brands to attract shoppers, especially as some flee to popular direct-to-consumer brands, online giants like Shein and Amazon, and big-box players like Target.
On Wednesday, it showed off its newest private brand, On 34th, at its Macy’s Herald Square flagship. The brand, named after the legacy store’s Manhattan location, is made of up of women’s clothing and accessories. The brand is designed for women ranging from 30 to 50 who want modern, versatile and easy-to-wear looks.
The new brand is hitting store shelves and Macy’s website at a challenging time for the company and much of the retail industry. Consumers have cut back on discretionary spending at stores as they’re pinched by steeper grocery bills and rent, while they spend on experiences like concerts and summer vacations. The department store operator cut its full-year outlook last month, after seeing consumers pull back on purchases of clothing and other items.
On 34th is the first of four new private brands that Macy’s plans to launch by the end of 2025. It also plans to refresh some existing labels and phase out others.
Macy’s Chief Merchandising Officer Nata Dvir said On 34th’s debut comes after more than two years of customer research.
“They cared about fit, quality and value and had a tremendous amount of passion around what they were putting on every single day,” she said. “And they deserved better.”
The kickoff event previewed another piece of Macy’s future, too: It marked one of the first public appearances of Tony Spring, since he was named its next CEO. Spring, who currently leads the parent company’s higher-end department store Bloomingdale’s, will succeed Jeff Gennette in February.
Gennette said Wednesday that consumers’ financial stress continues to show up in the company’s sales trends.
Macy’s significantly cut its financial expectations in June. The department store operator, which includes Bloomingdale’s and beauty chain Bluemercury, said it expects comparable owned-plus-licensed sales to drop by 6% to 7.5% for the year. It expects earnings per share of $2.70 to $3.20 for the year.
Shares of Macy’s have reflected investors’ concerns. Macy’s stock was down more than 20% so far this year as of Wednesday. The S&P 500, by comparison, is up 19% this year.
Some of Wall Street’s worries are company-specific, as investors question whether the legacy department store can keep up with shoppers’ changing…
Read More: Macy’s confronts struggles with new exclusive brands