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Monday, January 12, 2015

Macy’s Off-price Stores

Would it make sense for a Macy’s Discount Store to exist?  If you visit a Macy’s now, you will clearly see that they are not shy with putting clothing on sale.  It is certainly not unheard of to see clothes at 30% off (or higher) on a regular basis.  Many consumers now wait for the steeper discounts to hit the racks before pulling the trigger on a purchase.  This has created an endless cycle of the retailer being forced to discount.  It may be a good idea for Macy’s to try and reverse the trend and sell more product in the store at full price for longer periods of time.  Would putting closeout merchandise into a separate store location be the answer?

Macy’s  Inc. has the possibility of starting an off-price business for its namesake brand.  The department store giant said last Tuesday that it is considering creating a discount chain.  As far as we know this is not a finalized decision, but it appears to be a possibility.

A true off-price format for Macy’s wouldn't be too much of a shift in pricing because Macy’s stores already are known for frequent sales and a steady stream of promotions.  However, it may be a good way to reel in more full price selling at the main stores.

The company has flirted with the outlet business before. In 2013, it opened a Macy’s to anchor a wing of full-price stores at an outlet mall in Gurnee, Ill. Macy’s Chief Financial Officer  Karen Hoguet  has said the retailer would consider opening more such locations.

Macy’s sister chain, Bloomingdale’s has also been experimenting in the off-price market.  Although Bloomingdale’s got off to a slower start than Saks or Nordstrom, it now has 13 outlets versus 37 full service department stores.

Would this possible move into off-price retailing by Macy’s become a problem for TJ Maxx and Nordstrom Rack?

Wonder if Macy’s will start showing up at the Off-price trade shows?  Doubt it.

We are now curious to see if Macy’s off-price stores truly becomes a real deal.

Macy’s should probably visit the apparel closeout section here on Apparel Search to learn more about how to liquidate their excess clothing inventory.

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