Macy's Chairman and CEO Tony Spring has some advice for the retail industry: Don't write off department stores despite their woes and challenges.
Spring participated in the National Retail Federation's "Big Show 2025" conference Sunday at the Jacob K. Javits Convention Center in New York, a gathering that attracts thousands of attendees from around the world. Spring, the former chairman and CEO of luxury chain Bloomingdale's, took over as head of all three of Macy's retail banners — not only its namesake chain but also Bloomingdale's and Bluemercury — in February 2024.
Spring touted the advantages that department store chains such as Macy's and Bloomingdale's enjoy despite skepticism about their future, as well as the parent company's efforts to turn around its core chain. He also talked about why it shouldn't spin off Bloomingdale's and Bluemercury or go private.
Courtney Reagan, CNBC senior retail reporter, asked Spring at a panel session about "the doubters that say department stores are a tired format. ... Why do we need a department store anymore?" But Spring said nobody should be writing an obituary for the retail concept just yet.
"I love the question because the death of department stores has been going on since I was a child," Spring said. "So, I'm not that young anymore, and the same death knell has kind of been rung multiple times."
In recent years a number of U.S. department stores have gone out of business or have much fewer or just a few locations left, including Sears, Kmart, Lord & Taylor, J.C. Penney and Belk — while others like Macy's, Kohl's and Nordstrom have struggled. They face heightened competition from e-commerce, the demise of outdated malls and fast-expanding and less-pricey rivals such as Walmart, T.J. Maxx and Burlington Stores. Members of the Nordstrom family have struck a $6.25 billion deal with a partner to take the Nordstrom chain private, relieving it of the pressure of Wall Street's quarterly scrutiny.
But department stores today are able to pivot and have opportunities and flexibility that other retailers lack, according to Spring, because of the variety of merchandise they sell.
"You're not limited to just men's [apparel] or to women's or to kids or at home. ... We could basically expand any business or contract any business based on the opportunity that we saw that season," he said. "So if men's is a little softer and women's is doing well, we can fund into those things with more people, more advertising, more inventory. I think the key to remember is that the department store essentially is the curation of choice. We all love choice, right?"
For example, Bloomingdale's and Macy's both have large makeup departments that showcase different cosmetics brands, according to Spring.
"You have these wonderful halls of beauty that are prominent main floor presentation, that are celebrations of some of the most popular brands in the country," he said.
Brand showcase
Some luxury brands still rely on department stores.
Earlier in the day Sunday, fashion label Burberry CEO Joshua Schulman was interviewed by Pete Nordstrom, president and chief brand officer of the upscale Seattle-based chain. Schulman talked about the importance of a retailer such as Nordstrom for Burberry, even though it has its own standalone stores. Nordstrom provides added exposure.
"For Burberry and for other brands, Nordstrom is an incredible showcase to a very important customer segment in the United States," Schulman said. "And it's important for emerging brands. ... I think Nordstrom and a well-run luxury department store more broadly is also important not only for the initial discovery of the brand, but to discover how a brand can be changing and evolving. You know, because, yes, yes, we all have our own stores, but it's also important [because] in these luxury businesses, the customer's frequency isn't as high as it is in other categories."
A shopper may only come into a Burberry store once a year for a coat or gift, whereas that consumer may make multiple trips to Nordstrom to dress themselves and family and then see Burberry apparel while there, according to Schulman.
‘Growth engines’
During the Macy's session, Spring was flanked on the stage by Bloomingdale's CEO Olivier Bron and Maly Bernstein, CEO of luxury makeup-and-skincare seller Bluemercury. Those luxury retailers will be "growth engines" for the Macy's parent company, according to Spring.
He also discussed the progress that had been made on Macy's "Bold New Chapter" strategy, which entails shutting some stores and selling some real estate. He pointed out that last week Macy's announced the 66 underperforming store locations it plans to close, part of 150 that will be shut over several years. Macy's efforts to make improvements to an initial group of 50 go-forward stores have been fruitful, with improved financial results, according to Spring.
On Monday, Macy's provided a fiscal fourth-quarter update, saying that its Macy's 50 go-forward stores, Bloomingdale’s and Bluemercury were all continuing their trend of rising comparable sales.
“Reflecting ongoing positive response to Macy’s First 50 locations, we are excited to expand initiatives to an additional 75 Macy’s locations in fiscal 2025," Spring said in a statement.
However, Macy's also reported weaker sales for the holiday period, at or slightly below the low end of the previously issued range of $7.8 billion to $8 billion.
In the past year or so, Macy's has come under fire by several groups of dissident shareholders. In December, activists Barington Capital Group and Thor Equities called for Macy's to explore "strategic alternatives" for its Bloomingdale's and Bluemercury brands, saying their value wasn't being reflected in the stock price. Spring agreed that those two chains weren't getting proper recognition from Wall Street, but that's outweighed by the benefits of keeping them under one roof.
Unlike Nordstrom, he didn't see going private as a solution to any of Macy's challenges.
Reagan asked Spring what impact President-elect Donald Trump's proposed tariffs on Mexico and China would have on Macy's.
"Look, we're going to pay attention to everything, and we're going try to plan for the likely outcome," he said. "We all have dealt with campaigns, and we certainly had rhetoric, and then there's policy. This isn't our first rodeo. In 2016, 2017 we had to do more diversification of our private brand development.... We want to be able to be a good trading partner with the rest of the world. At the same time, we want it to be a fair relationship, and so these kinds of negotiating tactics sometimes will come into play."