Macy's 2000 Annual Report Download - page 6

We also opened t hree new furniture st ores in
2000 and undert ook a number of significant store
remodels in key market s. Nine new department
st ores and t w o f ree- st anding furniture st ores are
on t he horizon f or 2001. In t he area of t echnology,
our in- st ore syst ems and back- of - t he- house
operat ional support infrast ruct ure also lead t he
indust ry, which w e believe gives us a strat egic
competitive advant age w hen it comes to
capit alizing on f ut ure growth opport unit ies.
One of the most attract ive of t hese grow t h
opport unities w e t hink lies in capt uring
t he pot ent ial inherent in eff ective mult i- channel
int egration – a seamless w eaving t ogether of
st ores, cat alogs and e- commerce sit es int o a ret ail
fabric that covers a broad range of cust omer
needs and preferences. Although some of t he
luster just ifiably has worn off t he world’s view
of e- commerce in the last year, Federat ed remains
commit t ed t o effectively int egrating t he bricks
of our st ores wit h the clicks of our e- commerce
websit es. It is a mat t er of cust omer relat ionship
management , and t his is w here w e see
t he f ut ure headed for successful retailers.
While t he numbers being produced by our
Int ernet businesses still are immat erial, we feel
good about t he progress t hat is being made.
Our principal e- commerce sit es last year
generat ed $156 million in sales – up 150% from
t he prior year. In 2001, we expect t o see cont inued
dramatic growth in Internet sales as we further
nurt ure t hese brand- ext ending businesses.
As w ith anyt hing new, how ever, it inevit ably w ill
t ake awhile before we get t he st it ching in t his
new mult i- channel fabric exact ly right. St ill, we
know t hat being an indust ry leader means t aking
chances and being willing t o learn from whatever
mist akes are made along t he way. So given t he
choice, Federat ed w ould rather t ake some prudent
risks than choose t o do not hing – because as
we see it , doing not hing t ends to guarant ee t hat
not hing is what you’ll get in ret urn.
A Picture of 2001
Our goals for t he current year are t o be great at
t he f undamentals of ret ailing, and as such they
are not much changed from prior years.
We w ill cont inue t o plan and execut e t he
business wit h t he object ive of maximizing
earnings per share growth while increasing return
on invest ment . We int end t o do t his by focusing
on increasing operat ing income, depart ment st ore
earnings and cash f low, as w ell as by t aking
advant age of st rategic growth opport unit ies t hat
may emerge.
While we ant icipat e a 2% comp- st ore sales
increase in our depart ment st ores t his year,
reflect ing an economy t hat most observers
expect t o be sluggish int o t he second half of
t he year, our longer t erm goal is t o achieve
comp- st ore sales increases averaging about 3%.
While our department st ore EBITDA rate
(earnings before int erest, t axes, depreciat ion
and amort ization) now is approaching t he
highest in our indust ry – and, as such, will be
more diff icult t o grow in t he coming years –
we st ill see some modest opportunit y for
improvement . And w e are commit t ed t o
improving our return on invest ment and
generat ing significant cash f low.
2
97 98 99 00
9.7%
10 .3 %
11 . 8 %
12 .2%
Department Store
Operating Income
AS A PERCENT OF SALES
(EXCLUDES UNUSUAL ITEMS)
Our goals for the current year are to be
great at the fundamentals of retailing, and
as such they are not much changed ...