Macy’s (M, Financial) is an American mid-range chain of department stores, owned by multi-national holding corporation, Macy's, Inc. Macy’s and Bloomingdale’s are the two divisions owned by the company, headquartered in Cincinnati, Ohio. Macy’s primarily specializes in the sales of apparel, accessories, footwear, furniture, jewellery and beauty products.
Macy's, along with four other retail dry goods stores, was started between 1843 and 1855 by Rowland Hussey Macy, in downtown Haverhill, Massachusetts. Macy’s was relocated to New York City in 1858 and renamed "R. H. Macy & Co." on Sixth Avenue between 13th and 14th Streets.
As of January 2014, Macy’s operates 850 department stores locations in the United States, Puerto Rico, Guam and Hawaii.
In terms of revenue, Macy's is the biggest department store in the United States by retail sales and is the 16th- biggest retailer in the country.
Macy’s to get a makeover with Bluemercury
Macy’s, Inc. has announced that it will buy Bluemercury for $210 million by the end of its first fiscal quarter of 2015 in May.
Bluemercury, Inc., the American beauty and spa chain, founded in 1999, by Marla Malcolm Beck and Barry Jon Beck, operates 60 stores in 18 states and has a budding e-commerce business. Bluemercury will continue to be headed by co-founders Marla and Barry Beck, and the 500- strong employee structure will remain the same. Bluemercury houses a range of beauty products for men and women from over 100 high-end luxury brands including La Mer, Clinique, Laura Mercier, Bobbi Brown, Diptyque, and Oribe, as well as M-61 Laboratories, the Beck's private skincare line. Most of its retail locations include in-house spas, which provide services ranging from facials and waxing to various body treatments.
By acquiring Bluemercury, Macy’s is aiming in widening customer base and providing an enriching customers’ shopping experience across stores and the internet. Along with this, the company gradually intends to launch Bluemercury’s boutiques and products to its stores across the country.
Expectations after the acquisition
Macy’s acquisition of Bluemercury is expected to give the mid-market store an image makeover, and new means to reach out to more customers, adjoin fresh dimensions to product offering and use its skills in multi- channel retailing.
Macy’s has decided to add a few changes in the management structure to concentrate on boosting sales. Its restructuring initiatives includes Macy’s President, Jeff Gennette, who is set to focus more keenly on supervising merchandise planning and implementing strategies within the company’s business. Peter Sachse, Macy’s chief stores officer, has been moved to the role of Macy’s Chief for Innovation and Business Development.
Our Take
Macy’s has grown to be a dominant department retailer among various other companies in the market its closest competitors being Wal-Mart (WMT, Financial) and Target (TGT, Financial). The company, who has seen a significant increase in its total sales by over $5 billion in the past 5 years, is in its position of power due to its strong fundamentals and a fantastic management team. Bluemercury is one important feather on the company’s cap and this might be the start of Macy’s acquisition spree and more expansion can be envisioned in the times to come.
