Macy's 2007 Annual Report Download - page 7

• 2007 annual report
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• We completed the highly successful process of divesting certain
assets acquired in our 2005 merger with The May Department
Stores Company. Including the sale of After Hours Formalwear and
several duplicate facilities in 2007, total merger-related asset sales
over the past two years reached $4.5 billion.
• Macy’s introduced exclusive brands that included the distinctive
new Martha Stewart Collection. This was the largest brand launch
in our company’s history, and helped improve results in our Home
Store business. Also in 2007, we announced that Macy’s will
become the exclusive department store retailer of Tommy Hilfiger
men’s and women’s sportswear, beginning in fall 2008.
• The company accelerated investment in developing our direct-to-
consumer businesses – including macys.com, bloomingdales.com,
Bloomingdale’s By Mail, macysweddingchannel.com and
bloomingdalesweddingchannel.com. An investment of about
$300 million in 2006-2008 is being used to scale-up these
fast-growing businesses through improvements in delivery
efficiency, online site functionality and customer service.
• We attracted customers with groundbreaking new marketing
campaigns, based on the brand platform of “The Magic of Macy’s.”
This included new television commercials featuring well-known
celebrities and fashion brands available only at Macy’s.
• We continued to invest in improving existing Macy’s and
Bloomingdale’s locations to support an enhanced shopping
experience and drive same-store sales growth. In 2007, about
100 stores experienced remodeling or “reinvent” activity, and we
began rolling out the most advanced POS registers and systems
to the sales floors nationwide.
• Bloomingdale’s expanded its national presence with new stores in
South Coast Plaza in southern California and in Chevy Chase, MD.
Bloomingdale’s today operates 40 locations, representing growth
in stores of more than 10 percent over the past two years.
• Macy’s, Inc. strengthened its Board of Directors with the election
of two exceptional business leaders – Stephen F. Bollenbach,
former co-chairman and CEO of Hilton Hotels Corporation,
and Deirdre P. Connelly, president of U.S. operations at Eli Lilly
and Company.
National Brands, Localized Focus
Improving future sales and earnings performance requires
innovation in engaging our customers more effectively in every
store, as well as reducing total costs. At Macy’s, we are reallocating
our resources in 2008 and beyond to place more emphasis and
talent at the local market level to differentiate stores, serve
customers and drive business.
The initiative is called “My Macy’s.” It was developed over the past
year based on customer research, as well as input from Macy’s store
managers, senior division executives, merchandise vendors and
industry experts. Its goal is to accelerate sales growth in existing
locations by ensuring that core customers surrounding each
Macy’s store nd merchandise assortments, size ranges, marketing
programs and shopping experiences that are custom-tailored to
their needs.
To maximize the results from My Macy’s, the company is taking
action in certain markets that will:
• Concentrate more management talent in local markets,
effectively reducing the “span of control” over local stores;
• Create new positions in the eld to work with division central
planning and buying executives in helping to understand and
act on the merchandise needs of local customers;
• Empower locally-based executives to make more and better
decisions.
In essence, we plan to drive sales growth by improving our
knowledge at the local level and then acting quickly on that
knowledge. These moves will benefit our customers as well as
our shareholders.
This new structure is being adopted in geographic markets that
had been part of the Macy’s North, Macy’s Midwest and Macy’s
Northwest divisions, which are being consolidated into Macy’s
East, Macy’s South and Macy’s West, respectively. Reallocating
central office expense from the three consolidated divisions
will allow us to invest in market localization while reducing the
company’s SG&A expense by approximately $100 million in 2009
($60 million in the partial year of 2008). In addition, we believe
these consolidations will speed up decision making and simplify
the process of working with our vendors.
A Passion for Product and People
Among the many promising initiatives, ideas and strategies at
work at Macy’s, Inc. today, two subjects stand out as paramount.
One is the ongoing pursuit of interesting and distinctive
merchandise for our stores. Ours is a fashion business. We bring
the newest styles to the American shopper and help customize
current trends to the needs of each customer. We will never rest in
our pursuit of delivering the best brands, the most-wanted items
and the freshest thinking at Macy’s and Bloomingdale’s. Therefore,
this Annual Report is dedicated to a discussion of differentiation
at Macy’s, Inc.
Equally important is the continuing need to ensure that we have
the right individuals – the very best available talent – in every
position across the company. The ability to attract, develop
and retain the smartest and most motivated people is essential
to our success. This has been an historic strength of Macy’s,
Inc. and its predecessor companies. We are underscoring our
efforts to cultivate talent that approaches our business with
renewed creativity and diverse perspectives so that Macy’s and
Bloomingdale’s can continue to prosper in the years ahead.
We deeply appreciate the hard work and dedication of our people
again in 2007.
With the right products and talented people in place, we believe
the future holds significant promise for our business and for our
opportunity to create and sustain shareholder value.