Macy's 1999 Annual Report Download - page 14

New Bricks and Mortar
12
New Bricks and Mortar
Underscoring the importance of its premier department stores as the sales and profit engine of the
company, Federated continues to invest heavily in providing customers the most exciting store environments.
In 1999, the company’s store upgrade program was highlighted by extensive improvements at its three
largest flagships – Bloomingdale’s 59th Street and Macy’s Herald Square in Manhattan, and Macy’s
Union Square in San Francisco. Together, these multi-year store
upgrades involve our highest-volume, highest-visibility locations.
Macy’s Union Square project was completed in 1999, with work
at the New York Macy’s and Bloomingdale’s stores slated to
continue through next year.
In all, Federated’s capital plan for 2000-2002 calls for
spending $1.3 billion on approximately 120 separate
department store remodel projects.
Some of those remodels will include overhauling existing
junior’s, young men’s and activewear departments – key
growth businesses for the years immediately ahead. In some
cases, junior’s and young men’s may be brought together to
create dynamic environments where young customers can
meet, socialize and shop.
These departments will have painted concrete floors to
accentuate the fashion edge, trendy snack vending machines,
and edited assortments of merchandise – such as music and
books – beyond apparel and accessories. In some stores, the
departments will have leased kiosks where customers can buy
technology-related products such as beepers and cellular phones.
Store environments also are improved through the use of technology to speed customer transactions
and enhance convenience, such as electronic sign and scanner systems, and telephone headsets.
In some stores, for example, headsets allow sales specialists in large, busy women’s shoe departments
to communicate with runners assigned to locate and retrieve merchandise from storeroom shelves. This
permits sales specialists to serve several customers simultaneously, rather than one at a time.
Federated also will continue to build new stores to fortify its presence in important markets, expand
to adjacent markets, and serve growing population centers. The three-year capital budget for new
stores is approximately $900 million. Four new department stores and two new furniture galleries
opened in 1999, consistent with the planned pace of opening five to eight new locations each year in
the early part of the decade. And in 2000, the company plans to open eight new department stores and
four furniture stores.
The new Burdines at Aventura Mall in Miami opened in 1999 to rave reviews
for store architecture and visual presentation.