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It’s not all store closings at Macy’s Inc.
The $25 billion department store giant will be opening a new stand-alone specialty concept in Southlake, Tex., which will include a beauty and café component, according to sources.
Macy’s executives declined to confirm the project — and specific details of the concept could not be learned — but it is believed that this will be one of the initiatives revealed during the company’s investor day on Feb. 5.
Rachel Shechtman, the founder of Story, which Macy’s acquired in 2018, is said to be spearheading the new format. Story, which became a retail phenom with a strategy that included a new merchandising theme about every six weeks, now has shop-in-shops in 36 Macy’s doors around the country, continuing with Shechtman’s continual stream of retail experimentation.
According to sources familiar with the concept, the format will take an apothecary-based approach to beauty, with an emphasis on hero products from both established and emerging brands; it is believed there will be a wellness component that could include non-beauty items, too.
An online listing of the address where the concept is believed to be located names Market at Macy's as the tenant, and a link on Macy's web site lists numerous sales associate job openings. Market at Macy's is an existing in-store shop in a small number of Macy's full-line stores, although one source indicated the new concept will have a different name.
Beauty and wellness have been large elements of Story’s retail executions, both in terms of products and experience. For example, the current theme at Story inside Macy's Herald Square flagship in Manhattan is Feel Good, with an emphasis on wellness. It features everything from food to fitness and beauty. In addition, there is a regular stream of events, from journaling classes to barre workouts and a Valentine’s Day hairstyling bar.
The move comes at a pivotal moment for Macy’s Inc., which is in the midst of a restructuring process that is expected to impact everything from digital to private-label sourcing, buying and stores. Earlier this year, the retailer confirmed 29 store closings — 28 Macy’s and one Bloomingdale’s.
Like many department stores, Macy’s beauty business has struggled over the last decade or so. Even though it was able to retain its status as the leading prestige fragrance retailer in the U.S., specialty stores like Sephora and Ulta have more successfully tapped into the social media wave and recruited Millennial shoppers and the hip Indie brands that appeal to them. In key growth categories like makeup and skin care, Macy’s lost market share.
More recently, though, under the leadership of Nata Dvir, senior vice president and general business manager of beauty, leased and food, Macy’s has been making a comeback. The store has considerably increased its digital presence, both content-wise and in social media, revamped the look and feel of its beauty department and is increasingly adding brands and collaborations that are more relevant with Millennial and Gen Z shoppers — as with a buzzy Urban Decay Game of Thrones launch last year.
The retailer is also actively going after the prestige hair-care segment, according to documents obtained by WWD, quantifying the category as a $100 million opportunity for the store. Sources, who requested anonymity, said Macy's has done well with its rollout of Drybar products.
The venture wouldn’t be Macy’s only stand-alone beauty concept. The retailer purchased Bluemercury in 2015 for $210 million. At the time, the chain had 60 freestanding units. Today, there are almost 200, with 20 Bluemercury shops within the four walls of Macy’s department stores.
Macy's chief executive officer Jeff Gennette wouldn't comment on the new concept, but he is clearly bullish on beauty, eager to more effectively compete against specialty chains and lessen Macy's dependence on promotions in the beauty category. In an interview last year, he spoke of Bluemercury as instrumental in transforming Macy’s beauty areas, which have been adapting certain Bluemercury best practices and formats, i.e. open-sell environments, training associates and compensation. Associates are trained to be knowledgeable in multiple brands, helping to provide better and more efficient service. Beauty is one of Macy’s six “destination” areas; the others are dresses, fine-jewelry, big-ticket, men’s tailored and women’s shoes.
“If we can get the beauty formula right at Macy’s, that definitely moves the needle,” Gennette said during the interview. It’s about “infusing learnings from Bluemercury into the overall beauty strategy,” he said. “They’re huge.”
The need to "move the needle" is still top-of-mind. Despite improved selling trends over the holidays, Macy's is under pressure to show growth and greater profitability and boost its stock. Some activist shareholders have been pushing the company to monetize its real estate and close stores. The company does plan to have a tower built above its Herald Square flagship, which will have minimal impact on the store itself, and it is examining other real estate opportunities across the country.
For more beauty news, see:
Harrods Completes Beauty Hall Revamp With Events and Services Space
CK One Announces Joint Fragrance, Apparel Launch
Gucci Westman Joins Beauty’s Streaming Boom With New YouTube Series
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