WEBVTT - Macy's CEO Tony Spring Talks Evolution

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News. I'm pleased to say

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<v Speaker 1>that the CEO of Macy's Ink joins us right now,

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<v Speaker 1>Tony Spring here in studio too, Tony, great.

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<v Speaker 2>To see you here, to see you.

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<v Speaker 1>Three percent comp sales growth of Bloomingdale's with your old

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<v Speaker 1>job which used to run there, phenomenal ten percent comp

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<v Speaker 1>sales growth, and the turnaround that you've been trying to

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<v Speaker 1>execute for the Macy's brand seems to be really taking

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<v Speaker 1>hold one point six one and a half percent of

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<v Speaker 1>growth there. And I think if you just take the

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<v Speaker 1>stores that you've remodeled, your over two percent there.

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<v Speaker 3>This is now what four straight quarters of this?

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<v Speaker 4>This is four straight quarters or growth, five quarters of

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<v Speaker 4>beating our guidance ten point two percent growth you mentioned

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<v Speaker 4>at Bloomingdale's. Two point four percent growth at the reimagined stores.

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<v Speaker 4>We feel like we are on the curve beginning to

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<v Speaker 4>transform the Macy's in portfolio company.

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<v Speaker 1>The conversation was a bit different even a year ago.

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<v Speaker 1>I mean, people were writing Europe at Shortan the Macy's obituary.

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<v Speaker 1>They was right at the department store obituary. Is this

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<v Speaker 1>turnaround just about a better experience in the stores, or

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<v Speaker 1>is it about something different that we're not really picking

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<v Speaker 1>up on.

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<v Speaker 4>Well, I never bought into the extinction of department stores.

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<v Speaker 4>I think it's bad stores don't have a place in

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<v Speaker 4>the retail ecosystem. Sometimes they can survive longer than they

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<v Speaker 4>should great stores. People love people, love Harroads, they love Selfridges,

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<v Speaker 4>they love their department stores. We're a departments where we

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<v Speaker 4>do a really good job. When we do, we get

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<v Speaker 4>credit from the consumer. When we don't, we don't get

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<v Speaker 4>credit from the consumer. So I really just took it

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<v Speaker 4>internally and challenged our team to say, let's satisfy the customer.

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<v Speaker 4>Let's put people back in the stores. Let's update the

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<v Speaker 4>product mix, Let's do a little storytelling on the visuals.

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<v Speaker 4>How about some help in the fitting room where the

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<v Speaker 4>customer's craving support once she's taking her clothes up and

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<v Speaker 4>is looking to figure out what size is going.

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<v Speaker 2>To work for her.

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<v Speaker 1>So customers seem to be a little bit more excited

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<v Speaker 1>about what's going on. I am curious about the brands

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<v Speaker 1>of vendors that the things you sell there are they also,

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<v Speaker 1>I mean, are you seeing more interests from brands that

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<v Speaker 1>maybe had left the Macy's ecosystem in the past and

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<v Speaker 1>maybe are knocking back on your door.

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<v Speaker 4>Yeah, we've talked about new brands coming in Donna Karen,

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<v Speaker 4>Donna Karen Weekend. Rothy is new to both Macy's and Bloomingdale's.

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<v Speaker 4>The addition of Ted Baker and Theory and Reese Bloomingdale's

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<v Speaker 4>certainly big luxury expansion. So I think the brands we're

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<v Speaker 4>looking to see, are you ready to take care of

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<v Speaker 4>the business. Will you be a creative to my brand positioning?

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<v Speaker 4>Will you help me to reach customers I can't reach

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<v Speaker 4>without your support? And I think the team has done

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<v Speaker 4>a good job of explaining that Macy's thirty eight million

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<v Speaker 4>active customers that is not easy to buy in the

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<v Speaker 4>media market. So how do we make sure that we're

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<v Speaker 4>presenting our brand in the right way so that we're

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<v Speaker 4>capturing new customers that maybe we're the first time that

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<v Speaker 4>they're learning about our brand, and that we're proud of

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<v Speaker 4>the level of business we do.

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<v Speaker 3>I'm curious.

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<v Speaker 1>One of the big criticisms of your bold new chapter,

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<v Speaker 1>your turner round plan, is that you're basically shrinking the

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<v Speaker 1>idea that you're leaning heavily on Bloomingdale's, which is obviously

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<v Speaker 1>a success story, and there are a lot of people

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<v Speaker 1>that want to know sort of is this sort of

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<v Speaker 1>a big structural shift for you with regards to what

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<v Speaker 1>Macy's Inc.

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<v Speaker 3>Overall is going to be.

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<v Speaker 1>Is it going to be weighted more towards luxury and Bloomingdale's,

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<v Speaker 1>or is it going to be the complete sort of

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<v Speaker 1>ecosystem Macy's, Bloomingdale's, and bloom Mercury.

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<v Speaker 2>Well, it was a three part strategy from the very beginning. Yeah.

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<v Speaker 4>The first chapter of a bold new chapter was strengthen

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<v Speaker 4>and reimagined Macy's. And while we had to close some stores,

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<v Speaker 4>we still have a few more stores to close. The

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<v Speaker 4>primary focus was reimagining stores. I think when you and

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<v Speaker 4>I talked last time, I said, a strategy is not

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<v Speaker 4>a strategy, but it's just about closing underproductive stores or

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<v Speaker 4>monetizing assets. The strategy is making it better for the consumers.

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<v Speaker 4>So we put more people in the stores, We added

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<v Speaker 4>more inventory, we brought in new brands, we made the

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<v Speaker 4>website you more inspirational. But the second part of the

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<v Speaker 4>chapter is to grow Bloomingdale's. Because why wouldn't we We've

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<v Speaker 4>owned Bloomingdale's. It's a great brand and has so much

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<v Speaker 4>potential organic potential, physical potential, digital potential.

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<v Speaker 2>And then the third piece of.

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<v Speaker 4>The strategy was to make sure that we were operating

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<v Speaker 4>efficiently and effectively and serving the customer. So I'm proud

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<v Speaker 4>of the fact that the supply chain team, we're in

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<v Speaker 4>stock better, We're flowing inventory to the customer faster, We're

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<v Speaker 4>having less issues with the consumer.

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<v Speaker 2>That's why our net promoter scores, how we measure customer

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<v Speaker 2>service or going up.

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<v Speaker 3>Bloomingdale's growth.

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<v Speaker 1>There are some people that said, certainly in the most

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<v Speaker 1>recent quarters has benefited partly from let's just say the

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<v Speaker 1>relative absence of SAX Global Neiman marcus Bergdorf Sachs.

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<v Speaker 3>They're in bankruptcy proceedings.

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<v Speaker 1>They are expected to come out some time this year,

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<v Speaker 1>and I've spoken with their CEO and he's got some

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<v Speaker 1>pretty ambitious plans for what he think SAX can be.

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<v Speaker 1>Does that potential increase in competition worry you with regards

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<v Speaker 1>to Bloomingdale's trajectory.

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<v Speaker 4>No, I'm focused on Bloomingdale's. I'm focused on Olvia.

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<v Speaker 2>Do you want this team?

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<v Speaker 3>You never you don't go into Sacks.

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<v Speaker 4>Oh, I certainly shopped the competition, But I'm focused on

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<v Speaker 4>what we do.

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<v Speaker 2>You know, I learned a long time ago.

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<v Speaker 4>If you depict and on other people failing for you

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<v Speaker 4>to succeed, you're not going to get very far. Our

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<v Speaker 4>focus is on delivering a great experience for the Bloomingdale's customer.

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<v Speaker 2>You and I could go over and.

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<v Speaker 4>Walk fifty nine straight across the street from this great

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<v Speaker 4>building and see new brands, great people, great visuals, inspiring marketing,

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<v Speaker 4>forty carrots, yogurt. There's so much interest within the Bloomingdale's brand.

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<v Speaker 4>Does competitive missteps help Bloomingdale's, of course, But if Bloomingdale's

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<v Speaker 4>wasn't running effectively, wasn't healthy. And this strategy started a

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<v Speaker 4>number of years ago, as we added new brands, as

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<v Speaker 4>we declared our right and reason for being at our

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<v Speaker 4>one hundred and fiftieth anniversary in twenty twenty two, we

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<v Speaker 4>said we can do better.

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<v Speaker 3>Yeah.

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<v Speaker 1>Also, just as a personal note, you know they had

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<v Speaker 1>a sun Life pop up there by the way, You

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<v Speaker 1>need to get that back. It was only temper forever

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<v Speaker 1>in all series. I do want to ask you about

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<v Speaker 1>just the consumer overall. I mean, it's one thing to say, Okay,

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<v Speaker 1>your business is doing great. There are certain things you

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<v Speaker 1>control you don't necessarily control the economy. Gas prices are

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<v Speaker 1>significantly higher than where they were three months ago. Most

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<v Speaker 1>economists don't think they're coming down anytime soon. You already

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<v Speaker 1>had a consumer, as you have characterized in the past

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<v Speaker 1>as being kind of a K shaped or even E

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<v Speaker 1>shaped economy. Here do you see the state of the

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<v Speaker 1>US consumer improving anytime soon?

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<v Speaker 4>I think the consumer is going to continue to buy

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<v Speaker 4>rewards and things that they can enjoy, find a way

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<v Speaker 4>to escape. We talk about retail escapism or retail therapy,

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<v Speaker 4>and the gas prices being higher is not helpful to

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<v Speaker 4>the business, there's no question, but it's not an excuse

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<v Speaker 4>to not do business. Every single day we are doing

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<v Speaker 4>business at Macy's and blooming those in Blue Mercury. How

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<v Speaker 4>much business? How do we take business from the competition?

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<v Speaker 4>How do we inspire you to find things? So if

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<v Speaker 4>we have a new brand and sunglasses, if we have

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<v Speaker 4>a new Hookah sneaker, if we have a new pair

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<v Speaker 4>of page DNM genes, there's a reason for you to buy.

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<v Speaker 4>And by the way, we're actually accessible luxury. We are

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<v Speaker 4>in categories that for the most part, our core customer

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<v Speaker 4>can buy multiple times without putting a dent in their wallet.

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<v Speaker 1>A reminder for our Bloomberg audiences on television and radio.

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<v Speaker 1>Speaking right now with Tony Spring, the CEO of Macy's, Inc.

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<v Speaker 1>And with regards to that though, Tony, are you able

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<v Speaker 1>going to hold a price because part of the success

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<v Speaker 1>of Macy's that isn't just the comp sales growth, but

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<v Speaker 1>it's also been on the bottom line as well, to

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<v Speaker 1>avoid having a heavily discount. If we are indeed seeing

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<v Speaker 1>economic pressures out there.

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<v Speaker 4>Well, I think it's our job to manage the bottom line.

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<v Speaker 4>You know, it starts with first the top line, delivering

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<v Speaker 4>a right experience for the consumer. If we have the

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<v Speaker 4>right brands, if we don't overbuy the inventory, we're going

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<v Speaker 4>to be fine on the bottom line. Last year, we

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<v Speaker 4>had to navigate the uncertainty of tariffs, what country we're

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<v Speaker 4>going to make products in, how we're going to adjust orders,

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<v Speaker 4>how much of the cost was going to be shared

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<v Speaker 4>by the vendors versus shared by Macy's versus shared by

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<v Speaker 4>the customer. This year, we can be focused on taking

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<v Speaker 4>care of the customer. This year, we can be focused

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<v Speaker 4>on what are going to be the impacts of some

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<v Speaker 4>of the macro and geopolitical issues.

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<v Speaker 3>But you bring up tariffs.

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<v Speaker 1>I mean, I thought the tariff thing was behind and

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<v Speaker 1>then yesterday we had news here on Bloomberg that the

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<v Speaker 1>Trump administration is kind of reupping a.

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<v Speaker 3>Lot of those.

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<v Speaker 2>But it's not last year's tariffs.

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<v Speaker 4>And I don't like tariffs in general as a policy,

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<v Speaker 4>but we accept what happens. They're not the higher rates

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<v Speaker 4>and inconsistencies country by country you have people moving production

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<v Speaker 4>from China to Vietnam and back to China again.

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<v Speaker 2>So that's not going on this year.

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<v Speaker 4>How much opportunity cost did we lose last year because

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<v Speaker 4>we weren't focused on the consumer, because we weren't focused

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<v Speaker 4>on taking care of the customer. I'm excited about the

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<v Speaker 4>opportunities this year. I walked through the Father's Day assortment.

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<v Speaker 4>We looked terrific. I looked at the World Cup assortment.

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<v Speaker 4>We got lots of fun jerseys, and we got the

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<v Speaker 4>Knicks and the playoffs. So there's so much opportunity for

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<v Speaker 4>us to do business and play into fandom. I think

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<v Speaker 4>that exists in every family.

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<v Speaker 3>Are you a Knicks fan?

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<v Speaker 1>I am an ex fan? Okay, well, Congraticha. I'm a

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<v Speaker 1>bus fan, but I still wish you the best here.

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<v Speaker 1>I am curious though recently, and I know it's a

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<v Speaker 1>small investment, but we had the disclosure from Berkshire at

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<v Speaker 1>the way that they had taken a stake in Macy's,

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<v Speaker 1>a relatively small sake, what it was significant because it was,

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<v Speaker 1>I believe, the first stake that they've taken in a

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<v Speaker 1>department store in decades.

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<v Speaker 3>What does that say to you, not just with.

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<v Speaker 1>What Ferkshire and Warren Buffett might be doing, but just

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<v Speaker 1>overall the confidence that maybe might finally be returning to

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<v Speaker 1>Macy's Inc.

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<v Speaker 4>As a stock And my father used to call it

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<v Speaker 4>a shot in the arm. And we all need them

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<v Speaker 4>every once in a while. We love all of our investors.

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<v Speaker 4>I think Berkshire just has a wonderful reputation of believing

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<v Speaker 4>and investing for the long term. And I think it's

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<v Speaker 4>a proof to our team that doing the right things,

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<v Speaker 4>even if you don't see the immediate success, they will

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<v Speaker 4>be beneficial over time as long as you're honest with yourself.

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<v Speaker 4>I have an adage about the garden. Sometimes you plant

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<v Speaker 4>seeds and you want to go pick the fruit. It

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<v Speaker 4>doesn't work that way if you believe in what you're doing.

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<v Speaker 4>You have to take the time. You got a water,

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<v Speaker 4>you got to till the soil. Some things we do

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<v Speaker 4>are going to take a little bit of time. I

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<v Speaker 4>believe this.

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<v Speaker 2>Strategy is the right strategy for Macy's Inc.

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<v Speaker 1>You came into this job as CEO of Macy's Inc.

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<v Speaker 1>With this bold new chapter. It's a three year plan

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<v Speaker 1>is basically the third year. I am curious if you

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<v Speaker 1>can look ahead you're four or five and beyond and

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<v Speaker 1>maybe articulate what you think that next chapter, if you

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<v Speaker 1>will to use the analogy, might actually look like.

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<v Speaker 2>Yeah.

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<v Speaker 4>I think it's going to include more brands. It's going

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<v Speaker 4>to include more reimagined stores for Macy's. It's going to

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<v Speaker 4>include new ways of incorporating AI into powering a bold

0:10:23.679 --> 0:10:26.040
<v Speaker 4>new chapter so that we're able to be ahead of

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<v Speaker 4>the consumer and be able to deliver more of what

0:10:28.640 --> 0:10:30.640
<v Speaker 4>he or you're looking for. I think it's going to

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<v Speaker 4>be that continued expansion of Bloomingdal's, because with only fourteen

0:10:34.440 --> 0:10:37.080
<v Speaker 4>of the top fifty DMAs in the country, there is

0:10:37.120 --> 0:10:40.800
<v Speaker 4>plenty of expansion potential for Bloomingdals. And it's going to

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<v Speaker 4>be making sure that we continue to stay focused on

0:10:43.440 --> 0:10:47.440
<v Speaker 4>the customer, because sometimes when you get distracted by a

0:10:47.559 --> 0:10:51.559
<v Speaker 4>problem and opportunity outside of the business, you stop taking

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<v Speaker 4>care of the people that make the everyday business happen,

0:10:54.280 --> 0:10:55.160
<v Speaker 4>which is the consumer.

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<v Speaker 3>All right, Tony, we have to leave it there. I

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<v Speaker 3>really appreciate you joining us.

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<v Speaker 2>Thank you. Good to see you.

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<v Speaker 3>Ony Spring there.

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<v Speaker 1>He is the CEO of Macy's, fresh off the company's

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<v Speaker 1>gar needs four straight quarters of comp sales growth.