Macy’s, Bloomingdale’s CEO optimistic on same-store sales
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STEVE CHIOTAKIS: Happy shopping today if that’s your bag. Today marks the traditional start of the holiday shopping season. Stores are hoping for better numbers this year, and there’s a hint of optimism this time after they were hammered during the Great Recession.
One of those big retailers hoping for a bump is Macy’s. The company also owns Bloomingdale’s and other department stores across the country. Terry Lundgren is CEO of Macy’s Inc. And he’s with us now. Good morning sir.
TERRY LUNDGREN: Good morning Steve, how are you.
CHIOTAKIS: Doing well, doing well. There’s a little bit of optimism out there that I’m feeling or that I’m seeing anyway for the holiday retail season. What are you seeing for Macy’s and Bloomingdale’s so far?
LUNDGREN: So far we’ve had a very good year for the first three quarters both Macy’s and Bloomingdale’s are running up close to between 4 and 5 percent on same store sales year to data. So we feel very, very good. And we’re forecasting continued strong performance of plus 3 to 4 percent for the final quarter.
So we feel pretty darn good about this year.
CHIOTAKIS: The retail sector, though, as you know, has been hammered over the past few years. What have you done to prepare your company in case something happens?
LUNDGREN: Like the White House has suggested we didn’t waste a good recession. So the last two years
we’ve made major changes, particularly at Macy’s.
We felt that when we saw the challenge in the economy in 2008 that would be a good time to begin to make some of these changes because business was going to be tough no matter what the circumstances.
We replaced all of the regional opportunities with 69 district teams living in various markets. So we really got to know our customers.
It’s really local knowledge. What sells in Los Angeles this time of year is obviously very different that what sells in New York City. And what sells in Miami is very different than what sells in Minneapolis. Having experienced former buyers and former planning executives living in those cities and guiding our buying patterns has made a huge difference for us.,
CHIOTAKIS: A lot of people are doing their shopping online. How has the Internet changed the way you folks do business these, as far as shipping costs and things like that?
LUNDGREN: Well, if you spend $99, that’s the number that we seek from our consumers, if you spend $99 in this period we’re going to ship it to you for free.
That gets us to a hurdle rate that makes it not profitable necessarily, but it generally will raise our average unit sale and make it worthwhile so that we can break even on the shipping costs based on the higher purchase.
CHIOTAKIS: Your department stores are thought of as mid- to high-end retailers. What does it say about the economy if these stores are on the upswing?
LUNDGREN: I think people are making their check lists, they’re deciding how much money they want to spend on gifts. But the difference is they’re spending money on gifts and then they’re buying something for themselves. And I think that’s been the big early turnaround for us in these last several weeks. And I’m hoping that that idea carries on through the holiday season.
CHIOTAKIS: Terry Lundgren, CEO of Macy’s Incorporated. Terry, thank you.
LUNDGREN: Thanks, Steve.
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