2017 Retrospective: Macy’s Faces Changes, Nordstrom Remains Public
The retirement of Terry J. Lundgren marked the end of a tumultuous year for department-store giant Macy’s Inc.
Lundgren announced he was stepping down as chairman on Dec. 8 after a 14-year-run as Macy’s chief executive. He presided over Macy’s entrance into digital commerce and its growth into one of America’s biggest retailers.
Macy’s started 2017 by announcing the closing of 68 stores. The company anticipated closing 100 stores in the next few years and noted that 3,900 associates would be “displaced,” according to a press release. Macy’s estimated it saved $550 million due to “streamlining its store portfolio.”
Jeff Gennette, the former president of the Macy’s division, was promoted to the company’s chief executive officer on March 2017. During the year, the company continued to introduce new services such as same-day delivery of products at www.macys.com, www.bloomingdales.com and both brands’ mobile apps.
Financially, Macy’s was en route to meet its full-year sales and earnings guidance for the year. Sales in the third quarter of 2017 totaled $5.281 billion, which was a decrease of 6.1 percent. Same-store sales were down 4 percent during the quarter.
One of the big questions in American retail this year was if Nordstrom Inc. was going to go private. In October, the retailer’s top executives released a statement that it would suspend efforts to take the company private. However, after the retailer wrapped up the holiday season, the efforts would resume.
During 2017, Nordstrom opened a new full-line store at the Westfield Century City mall in Los Angeles and unveiled a full-line Nordstrom with the retailer’s most up-to-date interior and exterior designs in La Jolla, Calif. It also closed locations at Main Place in Santa Ana, Calif., and in Dulles, Va.
The company said it is focusing on finding ways to use technology to improve speed, convenience and personalization. Nordstrom incorporated these initiatives with Nordstrom Local. The new concept took a bow in October on Melrose Place in West Hollywood, Calif. Nordstrom Local has no inventory; instead, consumers can use Nordstrom services such as Buy Online, Pick-up In Store, alterations and tailoring, and other services for its Trunk Club division. Shoppers also can work with a personal stylist at Nordstrom Local.
The retailer’s off-price division, Nordstrom Rack, opened 18 new locations in 2017, including new sites at the FIGat7th shopping center in downtown Los Angeles. Off-price provides the largest source of new customers to the company, company executives said.
For its third fiscal quarter of 2017, net sales were $3.5 billion, an increase of 2 percent, in a year-over-year comparison. But its same-store sales declined 0.9 percent.