Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. I'm pleased to say
Speaker 1: that the CEO of Macy's Ink joins us right now,
Speaker 1: Tony Spring here in studio too, Tony, great.
Speaker 2: To see you here, to see you.
Speaker 1: Three percent comp sales growth of Bloomingdale's with your old
Speaker 1: job which used to run there, phenomenal ten percent comp
Speaker 1: sales growth, and the turnaround that you've been trying to
Speaker 1: execute for the Macy's brand seems to be really taking
Speaker 1: hold one point six one and a half percent of
Speaker 1: growth there. And I think if you just take the
Speaker 1: stores that you've remodeled, your over two percent there.
Speaker 3: This is now what four straight quarters of this?
Speaker 4: This is four straight quarters or growth, five quarters of
Speaker 4: beating our guidance ten point two percent growth you mentioned
Speaker 4: at Bloomingdale's. Two point four percent growth at the reimagined stores.
Speaker 4: We feel like we are on the curve beginning to
Speaker 4: transform the Macy's in portfolio company.
Speaker 1: The conversation was a bit different even a year ago.
Speaker 1: I mean, people were writing Europe at Shortan the Macy's obituary.
Speaker 1: They was right at the department store obituary. Is this
Speaker 1: turnaround just about a better experience in the stores, or
Speaker 1: is it about something different that we're not really picking
Speaker 1: up on.
Speaker 4: Well, I never bought into the extinction of department stores.
Speaker 4: I think it's bad stores don't have a place in
Speaker 4: the retail ecosystem. Sometimes they can survive longer than they
Speaker 4: should great stores. People love people, love Harroads, they love Selfridges,
Speaker 4: they love their department stores. We're a departments where we
Speaker 4: do a really good job. When we do, we get
Speaker 4: credit from the consumer. When we don't, we don't get
Speaker 4: credit from the consumer. So I really just took it
Speaker 4: internally and challenged our team to say, let's satisfy the customer.
Speaker 4: Let's put people back in the stores. Let's update the
Speaker 4: product mix, Let's do a little storytelling on the visuals.
Speaker 4: How about some help in the fitting room where the
Speaker 4: customer's craving support once she's taking her clothes up and
Speaker 4: is looking to figure out what size is going.
Speaker 2: To work for her.
Speaker 1: So customers seem to be a little bit more excited
Speaker 1: about what's going on. I am curious about the brands
Speaker 1: of vendors that the things you sell there are they also,
Speaker 1: I mean, are you seeing more interests from brands that
Speaker 1: maybe had left the Macy's ecosystem in the past and
Speaker 1: maybe are knocking back on your door.
Speaker 4: Yeah, we've talked about new brands coming in Donna Karen,
Speaker 4: Donna Karen Weekend. Rothy is new to both Macy's and Bloomingdale's.
Speaker 4: The addition of Ted Baker and Theory and Reese Bloomingdale's
Speaker 4: certainly big luxury expansion. So I think the brands we're
Speaker 4: looking to see, are you ready to take care of
Speaker 4: the business. Will you be a creative to my brand positioning?
Speaker 4: Will you help me to reach customers I can't reach
Speaker 4: without your support? And I think the team has done
Speaker 4: a good job of explaining that Macy's thirty eight million
Speaker 4: active customers that is not easy to buy in the
Speaker 4: media market. So how do we make sure that we're
Speaker 4: presenting our brand in the right way so that we're
Speaker 4: capturing new customers that maybe we're the first time that
Speaker 4: they're learning about our brand, and that we're proud of
Speaker 4: the level of business we do.
Speaker 3: I'm curious.
Speaker 1: One of the big criticisms of your bold new chapter,
Speaker 1: your turner round plan, is that you're basically shrinking the
Speaker 1: idea that you're leaning heavily on Bloomingdale's, which is obviously
Speaker 1: a success story, and there are a lot of people
Speaker 1: that want to know sort of is this sort of
Speaker 1: a big structural shift for you with regards to what
Speaker 1: Macy's Inc.
Speaker 3: Overall is going to be.
Speaker 1: Is it going to be weighted more towards luxury and Bloomingdale's,
Speaker 1: or is it going to be the complete sort of
Speaker 1: ecosystem Macy's, Bloomingdale's, and bloom Mercury.
Speaker 2: Well, it was a three part strategy from the very beginning. Yeah.
Speaker 4: The first chapter of a bold new chapter was strengthen
Speaker 4: and reimagined Macy's. And while we had to close some stores,
Speaker 4: we still have a few more stores to close. The
Speaker 4: primary focus was reimagining stores. I think when you and
Speaker 4: I talked last time, I said, a strategy is not
Speaker 4: a strategy, but it's just about closing underproductive stores or
Speaker 4: monetizing assets. The strategy is making it better for the consumers.
Speaker 4: So we put more people in the stores, We added
Speaker 4: more inventory, we brought in new brands, we made the
Speaker 4: website you more inspirational. But the second part of the
Speaker 4: chapter is to grow Bloomingdale's. Because why wouldn't we We've
Speaker 4: owned Bloomingdale's. It's a great brand and has so much
Speaker 4: potential organic potential, physical potential, digital potential.
Speaker 2: And then the third piece of.
Speaker 4: The strategy was to make sure that we were operating
Speaker 4: efficiently and effectively and serving the customer. So I'm proud
Speaker 4: of the fact that the supply chain team, we're in
Speaker 4: stock better, We're flowing inventory to the customer faster, We're
Speaker 4: having less issues with the consumer.
Speaker 2: That's why our net promoter scores, how we measure customer
Speaker 2: service or going up.
Speaker 3: Bloomingdale's growth.
Speaker 1: There are some people that said, certainly in the most
Speaker 1: recent quarters has benefited partly from let's just say the
Speaker 1: relative absence of SAX Global Neiman marcus Bergdorf Sachs.
Speaker 3: They're in bankruptcy proceedings.
Speaker 1: They are expected to come out some time this year,
Speaker 1: and I've spoken with their CEO and he's got some
Speaker 1: pretty ambitious plans for what he think SAX can be.
Speaker 1: Does that potential increase in competition worry you with regards
Speaker 1: to Bloomingdale's trajectory.
Speaker 4: No, I'm focused on Bloomingdale's. I'm focused on Olvia.
Speaker 2: Do you want this team?
Speaker 3: You never you don't go into Sacks.
Speaker 4: Oh, I certainly shopped the competition, But I'm focused on
Speaker 4: what we do.
Speaker 2: You know, I learned a long time ago.
Speaker 4: If you depict and on other people failing for you
Speaker 4: to succeed, you're not going to get very far. Our
Speaker 4: focus is on delivering a great experience for the Bloomingdale's customer.
Speaker 2: You and I could go over and.
Speaker 4: Walk fifty nine straight across the street from this great
Speaker 4: building and see new brands, great people, great visuals, inspiring marketing,
Speaker 4: forty carrots, yogurt. There's so much interest within the Bloomingdale's brand.
Speaker 4: Does competitive missteps help Bloomingdale's, of course, But if Bloomingdale's
Speaker 4: wasn't running effectively, wasn't healthy. And this strategy started a
Speaker 4: number of years ago, as we added new brands, as
Speaker 4: we declared our right and reason for being at our
Speaker 4: one hundred and fiftieth anniversary in twenty twenty two, we
Speaker 4: said we can do better.
Speaker 3: Yeah.
Speaker 1: Also, just as a personal note, you know they had
Speaker 1: a sun Life pop up there by the way, You
Speaker 1: need to get that back. It was only temper forever
Speaker 1: in all series. I do want to ask you about
Speaker 1: just the consumer overall. I mean, it's one thing to say, Okay,
Speaker 1: your business is doing great. There are certain things you
Speaker 1: control you don't necessarily control the economy. Gas prices are
Speaker 1: significantly higher than where they were three months ago. Most
Speaker 1: economists don't think they're coming down anytime soon. You already
Speaker 1: had a consumer, as you have characterized in the past
Speaker 1: as being kind of a K shaped or even E
Speaker 1: shaped economy. Here do you see the state of the
Speaker 1: US consumer improving anytime soon?
Speaker 4: I think the consumer is going to continue to buy
Speaker 4: rewards and things that they can enjoy, find a way
Speaker 4: to escape. We talk about retail escapism or retail therapy,
Speaker 4: and the gas prices being higher is not helpful to
Speaker 4: the business, there's no question, but it's not an excuse
Speaker 4: to not do business. Every single day we are doing
Speaker 4: business at Macy's and blooming those in Blue Mercury. How
Speaker 4: much business? How do we take business from the competition?
Speaker 4: How do we inspire you to find things? So if
Speaker 4: we have a new brand and sunglasses, if we have
Speaker 4: a new Hookah sneaker, if we have a new pair
Speaker 4: of page DNM genes, there's a reason for you to buy.
Speaker 4: And by the way, we're actually accessible luxury. We are
Speaker 4: in categories that for the most part, our core customer
Speaker 4: can buy multiple times without putting a dent in their wallet.
Speaker 1: A reminder for our Bloomberg audiences on television and radio.
Speaker 1: Speaking right now with Tony Spring, the CEO of Macy's, Inc.
Speaker 1: And with regards to that though, Tony, are you able
Speaker 1: going to hold a price because part of the success
Speaker 1: of Macy's that isn't just the comp sales growth, but
Speaker 1: it's also been on the bottom line as well, to
Speaker 1: avoid having a heavily discount. If we are indeed seeing
Speaker 1: economic pressures out there.
Speaker 4: Well, I think it's our job to manage the bottom line.
Speaker 4: You know, it starts with first the top line, delivering
Speaker 4: a right experience for the consumer. If we have the
Speaker 4: right brands, if we don't overbuy the inventory, we're going
Speaker 4: to be fine on the bottom line. Last year, we
Speaker 4: had to navigate the uncertainty of tariffs, what country we're
Speaker 4: going to make products in, how we're going to adjust orders,
Speaker 4: how much of the cost was going to be shared
Speaker 4: by the vendors versus shared by Macy's versus shared by
Speaker 4: the customer. This year, we can be focused on taking
Speaker 4: care of the customer. This year, we can be focused
Speaker 4: on what are going to be the impacts of some
Speaker 4: of the macro and geopolitical issues.
Speaker 3: But you bring up tariffs.
Speaker 1: I mean, I thought the tariff thing was behind and
Speaker 1: then yesterday we had news here on Bloomberg that the
Speaker 1: Trump administration is kind of reupping a.
Speaker 3: Lot of those.
Speaker 2: But it's not last year's tariffs.
Speaker 4: And I don't like tariffs in general as a policy,
Speaker 4: but we accept what happens. They're not the higher rates
Speaker 4: and inconsistencies country by country you have people moving production
Speaker 4: from China to Vietnam and back to China again.
Speaker 2: So that's not going on this year.
Speaker 4: How much opportunity cost did we lose last year because
Speaker 4: we weren't focused on the consumer, because we weren't focused
Speaker 4: on taking care of the customer. I'm excited about the
Speaker 4: opportunities this year. I walked through the Father's Day assortment.
Speaker 4: We looked terrific. I looked at the World Cup assortment.
Speaker 4: We got lots of fun jerseys, and we got the
Speaker 4: Knicks and the playoffs. So there's so much opportunity for
Speaker 4: us to do business and play into fandom. I think
Speaker 4: that exists in every family.
Speaker 3: Are you a Knicks fan?
Speaker 1: I am an ex fan? Okay, well, Congraticha. I'm a
Speaker 1: bus fan, but I still wish you the best here.
Speaker 1: I am curious though recently, and I know it's a
Speaker 1: small investment, but we had the disclosure from Berkshire at
Speaker 1: the way that they had taken a stake in Macy's,
Speaker 1: a relatively small sake, what it was significant because it was,
Speaker 1: I believe, the first stake that they've taken in a
Speaker 1: department store in decades.
Speaker 3: What does that say to you, not just with.
Speaker 1: What Ferkshire and Warren Buffett might be doing, but just
Speaker 1: overall the confidence that maybe might finally be returning to
Speaker 1: Macy's Inc.
Speaker 4: As a stock And my father used to call it
Speaker 4: a shot in the arm. And we all need them
Speaker 4: every once in a while. We love all of our investors.
Speaker 4: I think Berkshire just has a wonderful reputation of believing
Speaker 4: and investing for the long term. And I think it's
Speaker 4: a proof to our team that doing the right things,
Speaker 4: even if you don't see the immediate success, they will
Speaker 4: be beneficial over time as long as you're honest with yourself.
Speaker 4: I have an adage about the garden. Sometimes you plant
Speaker 4: seeds and you want to go pick the fruit. It
Speaker 4: doesn't work that way if you believe in what you're doing.
Speaker 4: You have to take the time. You got a water,
Speaker 4: you got to till the soil. Some things we do
Speaker 4: are going to take a little bit of time. I
Speaker 4: believe this.
Speaker 2: Strategy is the right strategy for Macy's Inc.
Speaker 1: You came into this job as CEO of Macy's Inc.
Speaker 1: With this bold new chapter. It's a three year plan
Speaker 1: is basically the third year. I am curious if you
Speaker 1: can look ahead you're four or five and beyond and
Speaker 1: maybe articulate what you think that next chapter, if you
Speaker 1: will to use the analogy, might actually look like.
Speaker 2: Yeah.
Speaker 4: I think it's going to include more brands. It's going
Speaker 4: to include more reimagined stores for Macy's. It's going to
Speaker 4: include new ways of incorporating AI into powering a bold
Speaker 4: new chapter so that we're able to be ahead of
Speaker 4: the consumer and be able to deliver more of what
Speaker 4: he or you're looking for. I think it's going to
Speaker 4: be that continued expansion of Bloomingdal's, because with only fourteen
Speaker 4: of the top fifty DMAs in the country, there is
Speaker 4: plenty of expansion potential for Bloomingdals. And it's going to
Speaker 4: be making sure that we continue to stay focused on
Speaker 4: the customer, because sometimes when you get distracted by a
Speaker 4: problem and opportunity outside of the business, you stop taking
Speaker 4: care of the people that make the everyday business happen,
Speaker 4: which is the consumer.
Speaker 3: All right, Tony, we have to leave it there. I
Speaker 3: really appreciate you joining us.
Speaker 2: Thank you. Good to see you.
Speaker 3: Ony Spring there.
Speaker 1: He is the CEO of Macy's, fresh off the company's
Speaker 1: gar needs four straight quarters of comp sales growth.