Today, Macy’s Inc. (NYSE: M) announced its new three-year strategy to stabilize profitability and lead the fashion retailer to growth.
The Polaris strategy follows a time when Macy’s struggled under declining mall traffic, caused by the rising online shopping as well as strong competition.
The Company outlined the five major components of its new Polaris strategy, including strengthening customer relationships, curating quality fashion, accelerating digital growth, optimizing store portfolio and resetting the cost base.
Within the three-years, Macy’s plans to close down around 125 stores in lower tier malls and explore new off-mall formats. Optimizing the store portfolio also covers continuing the growth treatment of stores in best malls.
The growth treatment contains improvements to the physical store, merchandising strategies, technology improvement, talent and local marketing, and has already been applied to 150 stores, that were responsible for approximately 50% of last year’s store sales.
Additionally, Macy’s provided preliminary fourth-quarter net sales estimates of USD 8.3 billions and USD 24.5 billion for the whole fiscal year 2019.
Jeff Gennette, Chairman and Chief Executive Officer of Macy’s Inc. said:
“We will focus our resources on the healthy parts of our business, directly address the unhealthy parts of the business and explore new revenue streams. Over the past three years, we have shown we can grow the top-line; however, we have significant work to do to improve the bottom-line.”
For 2020, Macy’s provided financial guidance including expected net sales in the range of USD 23.6 billion to USD 23.9 billion as well as adjusted diluted earnings per share between USD 2.45 and USD 2.65.
“We are confident the strategy we are announcing today will allow us to stabilize margin in 2020 and set the foundation for sustainable, profitable growth,”
added the Chief Executive Officer.
Macy’s further announced to establish single corporate headquarters and relocate its digital business to the heart of the fashion industry, New York City.
The Retailer scheduled the announcement of the fourth-quarter and full-year 2019 earnings for February 25,2020.