—Macy’s

• —Market share, Financial position, Experience
  • —About 12.2% Market share (Lucca and Karcich 2008)
  • —In business since 1858 (Herron 2010)
  • $27.2 billion sales in 2012;
  • —Gross Margin ≈ $11.1 billion; Long-term Debt ≈ $6.8 billion (Macy’s Inc. 2013).
  • Increase in net sales in 2012 = 4.9% ; ROIC in 2012 = 21.2%; Total shareholder return 158.7% (Macy’s Inc. 2013)
  • # 103 in Fortune 500 companies in 2010 (Macy’s Inc. 2013)

• Breadth of Product Line
  • —Retail leader in private brand development
  • —Exclusive department store for for Ellen Tracy branded sportswear, Sunglass Hut, Kenneth Cole Reaction men’s sportswear, and ‘Material Girl’ (Herron 2010).
  • —Carries multiple other brands e.g. Alfani, and Style & Co; products include apparel, accessories, footwear, cosmetics and home (Herron 2010).
• —Distribution & Location, Technology, R&D, & Age of facilities
  • Over 845 stores in 45 states; to open 4 new stores in 2014 (Herron 2010).
  • Over 187,000 employees (Herron 2010)
  • —Remodel of Herald flagship store in New York city at $400 million to enhance its technological capabilities (Macy’s Inc. 2013).
  • Move from traditional department store to Omni channel, which implies consistent and seamless service in stores, website and mobile devices (Macy’s Inc. 2013). => focus on mobile devices and tablets throughout the stores = >use technology to drive additional sales.
• —Price competitiveness and Product quality
  • —Prices higher than Kohl’s and JC Penny
  • Focus on fashion, unique, and quality at a good price (Lucca and Karcich 2008). => Bloomingdale’s focus on exclusive merchandise
  • Strong brand equity built on a focus on exclusive merchandise (Lucca and Karcich 2008).
• Promotion, Capacity and Productivity, personnel, customer profile
  • —Diverse promotional strategies – e.g. discounted sales, coupons
  • Three-pronged strategy – M.O.M. (My Macy’s, Omni channel, and Magic selling).
  • —Multicultural marketing
  • —Diverse workforce- over 75% = women, and 52% = from racial minorities
  • Employee recruitment and retention strategies
  • —Millennial strategy – targeted at customers aged 19-30 (Zacks Equity Research 2012)
• —Community reputation and general image
  • —Strong corporate social responsibility programs (Macy’s Inc. 2013)
  • Encourages associates to volunteer in communities
  • Stringent vendor and supplier code of conduct
  • Strong stance against human trafficking (Macy’s Inc. 2013)
  • —Environmental protection activities e.g. recycling (Macy’s Inc. 2013)

—Competitor: Sears

• —Part of Sears Holding Corporation (operates sears, Kmart, and sears in Canada).
• —834 full-line stores in 50 states and Puerto Rico; Stores primarily located in shopping malls and average 134,000 square feet
• Diverse products – appliances, shoes, electronics, lawn and gardening, automotive services, apparel
• —Sears Domestic- Specialty stores, commercial sales outlets, and 33 sears essentials in 19 states (Reuters 2013)
• —Financials
  • —Revenues in 2012 $12,484 million; $12,260 in year ended Jan 2013
  • —Losses per share $22.47 in year ending Jan 2012, and $4.6 in year ending Jan 2013
• —Restructuring has helped to reduce losses e.g. change of management

—Competitor: JC Penny

• —Part of JC Penny Company, Inc., a publicly traded company
• —1102 department stores in 49 states and Puerto Rico
• Diverse merchandise e.g. apparel, shoes, accessories, jewelry, beauty products
• —Brands – e.g. Fair Square, Liz Claiborne, Okie Dokie, Worthington (Reuters 2013)
• —Financials:
  • —$17.3 billion revenues in year ended Jan 31, 2012; $13.0 billion in year ended Jan 31, 2013
  • Net earnings $1.26 and net losses of $3.49 respectively
  • —Change from net earnings to net losses is attributable to $4 billion decrease in revenue (Bloomberg Businessweek 2013)

—Company Profile: Target

• —Operates in in the US and Canada and online e-commerce portals
• —1763 stores in 49 states and District of Columbia
• —General merchandise e.g. household essential, apparel, electronics, home décor, pet supplies; limited grocery supply
• —Own and exclusive brands e.g. Archer Farms, Boots & Barkley, Gillian & O’Malley
• —Promotion strategy – discounted sales
• —Financials:
  • $69.9 billion for year ended Jan 31, 2012; $73.3 billion for year ended Jan 31, 2013
  • Net earnings per share $4.24 for 2012, and 4.26 for 2013
  • —Exceeded analysts expectations => healthy liquidity and positive outlook for 2014 and 2015 (Bloomberg Businessweek 2013).

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