Macy’s Calls in Saks Split-Up Guru
Macy’s Inc. has hired the financial engineering wizard behind Saks’ closely watched store-digital decoupling, multiple sources confirmed to Sourcing Journal, a sign that the retailer is serious about responding to activist investors’ calls to review the fast-growing e-commerce business.
In a Nutshell: Jeff Gennette, CEO of the retail giant that owns the Macy’s brand in addition to Bloomingdale’s and BlueMercury, told Wall Street analysts that the company routinely reviews “the structure in our business and our strategy.”
“We’re open to all options that are likely to create long term shareholder value,” he told analysts on a conference call Thursday.
Macy’s had already analyzed e-commerce and brick-and-mortar to see “how each contribute to the value of the company, as well as how each benefits from being integrated and working together,” Gennette said. A new curated digital marketplace in partnership with Mirakl, set to launch in the second half next year, would augment Macy’s and Bloomingdale’s assortment and help the company reach more customers.
Matt Baer, chief digital and customer officer at Macy’s, Inc., described the Mirakl news as “an exciting next chapter in our digital evolution.”
“The marketplace platform will further accelerate our Polaris strategy and unlock new opportunities for sustainable and profitable growth,” he said in a statement. “Our digital business is targeted to generate $10 billion in sales by 2023, and we expect the new marketplace platform to produce incremental revenue on top of that target.”
He added that the “marketplace platform will enable us to expand our assortment at a low incremental cost, while giving Macy’s customers easy access to even more product selection to meet their diverse needs.”
On the topic of a Saks-inspired click-and-brick split, Gennette would only say that the retailer is further investigating how such a move could unlock value for Macy’s and has retained a retail expert at consulting firm AlixPartners, the brains behind the luxury rival’s split-up, to do so.
Of course, Saks’ success is no guarantee that separating stores from online would make sense at Macy’s much larger operation. Digital is playing a bigger for the retailer as its prioritizes off-mall location, Gennette said. “The interplay between our digital and physical assets is more important than ever,” he added.