Macy's 2008 Annual Report Download - page 10

Company’s new organization structure, MMG will focus solely on the design, development and
marketing of Macy’s private label brands. Bloomingdale’s uses MMG for only a small portion of its
private label merchandise.
• Macy’s Logistics and Operations (“Macy’s Logistics”), a division of a wholly-owned indirect
subsidiary of the Company, provides warehousing and merchandise distribution services, store design
and construction services and certain supply purchasing services for the Company’s operations.
• Macy’s Home Store, LLC, a wholly-owned indirect subsidiary of the Company, was responsible during
2008 for the overall strategy, merchandising and marketing of home-related merchandise categories in
all of the Company’s Macy’s stores. Under the Company’s new organization structure, the home store
functions will be integrated into the Macy’s national merchandising, merchandise planning, stores and
marketing organizations.
• Macy’s Corporate Marketing, a division of a wholly-owned subsidiary of the Company, was
responsible during 2008 for the development of distinctive sales promotion programs that were
national in scope for the all of the Company’s Macy’s stores and for managing national public relations
and annual events, credit marketing and cause-related marketing initiatives for the Macy’s stores.
Under the Company’s new Macy’s branded organization structure, Macy’s Corporate Marketing will
be integrated into the new unified national organization.
• A specialized staff maintained in the Company’s corporate offices provides services for all retail
operations of the Company in such areas as accounting, legal, human resources, real estate and
insurance, as well as various other corporate office functions.
MCCS and MMG also offer their services, either directly or indirectly, to unrelated third parties.
The Company’s executive offices are located at 7 West Seventh Street, Cincinnati, Ohio 45202, telephone
number: [phone] and 151 West 34th Street, New York, New York 10001, telephone number: [phone].
Employees. As of January 31, 2009, the Company’s continuing operations had approximately 167,000
regular full-time and part-time employees. Because of the seasonal nature of the retail business, the number of
employees peaks in the holiday season. Approximately 10% of the Company’s employees as of January 31, 2009
were represented by unions. Management considers its relations with its employees to be satisfactory.
Seasonality. The retail business is seasonal in nature with a high proportion of sales and operating income
generated in the months of November and December. Working capital requirements fluctuate during the year,
increasing in mid-summer in anticipation of the fall merchandising season and increasing substantially prior to
the holiday season when the Company must carry significantly higher inventory levels.
Purchasing. The Company purchases merchandise from many suppliers, no one of which accounted for
more than 5% of the Company’s net purchases during 2008. The Company has no long-term purchase
commitments or arrangements with any of its suppliers, and believes that it is not dependent on any one supplier.
The Company considers its relations with its suppliers to be satisfactory.
Competition. The retailing industry is intensely competitive. The Company’s stores and direct-to-customer
business operations compete with many retailing formats in the geographic areas in which they operate, including
department stores, specialty stores, general merchandise stores, off-price and discount stores, new and
established forms of home shopping (including the Internet, mail order catalogs and television) and
manufacturers’ outlets, among others. The retailers with which the Company competes include Bed Bath &
Beyond, Belk, Bon Ton, Burlington Coat Factory, Dillard’s, Gap, Gottschalk, J.C. Penney, Kohl’s, Limited,
Lord & Taylor, Neiman Marcus, Nordstrom, Saks, Sears, Stage Stores, Target, TJ Maxx and Wal-Mart. The
Company seeks to attract customers by offering superior selections, value pricing, and strong private label
merchandise in stores that are located in premier locations, and by providing an exciting shopping environment
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