Macy's Lundgren stands up to the critics

Depending on the source, Macy's (NYSE:M) is either at a critical juncture as department stores face pressure from online and discount retailers, or doing exactly what needs to be done to transition into a changing market. According to the company's CEO Terry Lundgren, it's the latter.

"It's definitely been a year of transition," Lundgren told Women's Wear Daily. "The industry and Macy's are clearly facing a challenging period. But we are fortunate on a couple of fronts. Our online business has grown in its momentum and acceptability. We have been leaders in the subject. We were early adopters. There's been continuous improvement and investment over the last 20 years. The good part is we got in front of the business.

"We've been through crises before and we came out better than we were before," he said. "In 2001, everybody was saying the department store is dead. That's when we started to reshape Macy's. In 2008-09, there were similar cries, that retail and the fashion world is coming to an end—we got through it."

"People are now once again saying that."

Lundgren points to the retailer's legacy of providing entertainment through sponsored festivities like the Macy's Thanksgiving Day Parade and in-store events, which include the retailer's attempts to court Hispanic shoppers with the Thalía Sodi line and initiatives to woo millennials such as the One Below department at the company's flagship store.

There's the new Macy's Backstage off-price format, Bloomingdale's The Outlet and international growth through Alibaba's Tmall in China and a new store in Abu Dhabi, not to mention the acquisition of beauty brand Blue Mercury and the partnership with LensCrafters to open outlets inside Macy's stores.

But there's also pressure from investors to monetize Macy's real estate. Lundgren has ruled out the creation of an REIT, but will likely close dozens of stores in the near future.

Lundgren isn't done transforming Macy's. "No one wants to go through a difficult business period," Lundgren told WWD. "It's actually very energizing for me. I like it when people say I can't do something, or say something negative about my company. I use that as a motivator to prove my critics wrong. As an athlete friend of mine once told me, a setback is just a setup for a comeback."

For more:
-See this feature story in WWD 

Related stories:
Macy's could close stores, redevelop flagships
Macy's giving away cash cards to shoppers
Macy's brings LensCrafters in-store
Macy's debuts One Below for millennials
Macy's Backstage announces two more pilot locations

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