Macy's 2004 Annual Report Download - page 6

DEAR FELLOW SHAREHOLDER:
While our company again produced strong financial results in fiscal 2004,
perhaps our most remarkable achievement was the significant positive
change we have initiated to fortify the very foundations of our business for
the long run.
• We made the landmark decision to convert our regional store
nameplates to the Macy’s brand. As of March 6, 2005, all of our stores,
catalogs and e-commerce sites operate as either Bloomingdale’s or
Macy’s. This allows us to focus on the two strongest brands in American
department store retailing – both deeply rooted in fashion, service and
community involvement – and to drive sales and profitability by serving
a well-defined core customer with a unified message. Our five regionally
based Macy’s divisions ensure our decision-making stays close to the
customer and that our stores and assortments reflect local tastes
and preferences.
• We drove significant progress in each of the four strategic priorities
that guide our business decisions. The four priorities – Assortments,
Price Simplification, Improving the Shopping Experience and Marketing
– are described below. They have helped sharpen our discipline and
creativity, while providing Macy’s a well-defined roadmap for continuous
improvement in the most crucial aspects of daily operations.
• We launched Macy’s Home Store as a consolidated central organization
for merchandising and marketing home-related merchandise for all
Macy’s stores nationwide. Going forward, this best-in-class organization
will provide our core customer with a fashion-driven home assortment
that is uniquely Macy’s.
• In February 2005, we entered into an agreement to acquire The May
Department Stores Company. The acquisition would create a stronger,
more resourceful company with more than 950 department stores
operating in 64 of the nation’s top 65 markets. Pending regulatory
review and shareholder approval, the transaction is expected to be
completed in the third quarter this year. Meanwhile, we are working
to finalize plans for the combined company.
DIFFERENTIATED AND EDITED ASSORTMENTS
Recognizing that great product assortments and brands in our stores
create customer excitement and build loyalty among shoppers, we are
implementing programs to ensure our assortments are fresh, new and
fashion-right so Macy’s is differentiated in the marketplace. Concurrently,
we are pursuing a good-better-best merchandising strategy that aligns
our assortments with our core customer’s expectation for price
and quality. And we are more tightly editing assortments to
reduce duplication and clutter on the selling floor.
The company’s private brands continue to grow at
a faster pace than overall sales trends, providing
differentiation and value to customers. In 2004,
Federated’s private brands – such as I·N·C, Charter Club/
Clubroom, Alfani, Style & Co., Hotel Collection and
Tools of the Trade – represented about 17.4 percent
of total sales toward our ultimate goal of 20 percent.
LETTER TO
SHAREHOLDERS
POSITIVE CHANGE
CREATES BENEFITS
FOR CUSTOMERS AND
SHAREHOLDERS.
P A G E T W O
TERRY J. LUNDGREN
CHAIRMAN, PRESIDENT &
CHIEF EXECUTIVE OFFICER