It's a brutal market for department stores, but that hasn't stopped Macy's Inc. chief executive Terry Lundgren from pursuing a medley of growth strategies. The latest, to launch on Tuesday, is an alliance with the Tommy Hilfiger Group, in which Macy's will become the only U.S. department store to sell Hilfiger's sportswear. And, according to the Associated Press, Macy's
will pursue similar deals with other designers.
Since his Federated Department Stores, now Macy's Inc., acquired rival May Department Stores Co. for $18 billion in 2005, Lundgren has implemented a number of substantial initiatives. He took the controversial step of rebranding
May's iconic department stores as Macy's; reorganized the company,
shuttering three of six regional offices; directed stores to identify and stock goods more attuned
to local tastes; and in May, announced a deal that would see
FAO Schwartz toy stores pop up in Macy's stores nationwide.
Macy's posted a $1 million drop in earnings -- to $73 million -- in the second quarter of 2008 and saw revenue fall to $5.7 billion from $5.9 billion versus the same period a year earlier. Still, Macy's outperformed many of its peers -- Saks Inc. lost $31.7 million in the second-quarter 08, and J.C. Penney Co. lost $65 million -- and Lundgren is surely betting that the deals he's making now will lift Macy's when the economic storm subsides.
- Suzanne Stevens
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