Macy's 2009 Annual Report Download - page 3

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MY MACY’S – After initial pilots in 20 markets in 2008, we rolled out the My Macy’s localization
initiative across the country in 2009. In doing so, we created eight stores regions and 49 new
districts (for a total of 69 districts). We added human intelligence – including new district
merchants and planners – in each district in a manner that enables us to tailor merchandise
assortments and the shopping experience by location. My Macy’s is proving itself to be a
powerful competitive differentiator and driver of sales. In 2009, all of the company’s top 12
markets in sales growth were from the initial My Macy’s pilot districts. As the national rollout
progresses, we expect the remainder of the company to perform consistently with the initial
pilot districts.
UNIFIED ORGANIZATION – Concurrent with the rollout of My Macy’s, we migrated from
an operating division structure to one unifi ed organization for all of Macy’s. By eliminating
redundancy in central offi ces and instituting consistency in our stores, we are able to act more
quickly, sharpen execution and partner more effectively with our vendors and business partners
while reducing administrative expense. Through these actions, and even with additional
investment in local markets through My Macy’s in 2008 and 2009, we have been able to reduce
previously planned expenses by more than $500 million per year going forward.
BLOOMINGDALE’S – Our company’s upscale brand signifi cantly improved its performance
in the second half of 2009. Bloomingdale’s has re-emphasized designer merchandise,
contemporary fashion and uniqueness in its assortment. During the year, Bloomingdale’s
debuted an entirely new Beauty Floor on the main level of its Manhattan fl agship store. In early
2010, two Bloomingdale’s stores (one for apparel, one for home merchandise) opened in Dubai.
These stores, operated under a license agreement with Al Tayer Insignia, a company of Al Tayer
Group LLC, are Macy’s, Inc.’s fi rst international locations. A Bloomingdale’s Outlet store concept
is planned to launch in fall 2010 with four locations and others to follow in subsequent years.
MULTICHANNEL INTEGRATION – We continued to emphasize the integration of stores and
online sites at Macy’s and at Bloomingdale’s. This has helped us to create a 360-degree view
of the customer so we can serve her needs across channels, which in turn drives sales in both
stores and online. Our investments in the infrastructure of our online businesses over the
past four years are paying off. In fi scal 2009, online sales (macys.com and bloomingdales.com
combined) were up 20 percent.
TO OUR
SHAREHOLDERS
NOTHING TELLS
OUR STORY ABOUT
2009 BETTER THAN
THE SPECIFICS
OF WHAT WE
ACCOMPLISHED:
TERRY J. LUNDGREN
Chairman, President
and Chief Executive Offi cer
I’ve never been so proud of the accomplishments of our organization as I am about our
performance in 2009. In spite of the weak economy, we initiated unprecedented changes in
our business – unifying Macy’s into a single organization, rolling out our successful My Macy’s
initiative nationwide, upgrading our information systems and technology, and strategically
reducing expenses, inventory levels and capital expenditures.
Rather than major disruption, as was predicted by some naysayers, the result was better-than-
expected sales, improvements in earnings and cash fl ow, and enhanced gross margins. Even after
paying off $966 million in debt in fi scal 2009, we ended the year with $1.7 billion in cash – about
$300 million more than the end of fi scal 2008.
With this year of organizational change now behind us, we are devoting ourselves in 2010
to disciplined execution of the strategies that we have set in place and that have shown such
encouraging initial results. We are putting the customer at the center of everything we do
through the philosophy of My Macy’s. We expect this approach will help Macy’s, Inc. to
continue to outperform many of its retail competitors and gain market share.