Jeffrey Gennette is shaking things up at Macy’s Inc., the venerable department store chain with roots dating back as far as 1858.
“We have a lot going for us, but Macy’s heritage isn’t going to be enough to guarantee success,” Gennette in March told attendees at Shoptalk in Las Vegas.
“Yesterday’s playbook isn’t going to work for tomorrow,” he said. “Our customer is moving fast. She has one foot in the future, and we need to catch up.”
A 35-year Macy’s veteran with a strong background in merchandising, Gennette assumed the top position of the New York City-based company in March 2017. He immediately set out to reinvigorate the chain, by closing unprofitable stores, boosting online shopping and luring in customers by creating in-store experiences, particularly with two recent acquisitions, B8ta and Story. The retail startups offer pop-up stores inside of Macy’s “that give temporary space to edgy and techie products,” according to Fortune.
Gennette is getting lots of praise for the moves.
“He has a feel, he has an eye, he’s a merchant,” NBC’s Jim Cramer said on “Squawk on the Street.” “The stores have a better look and feel. And people have to go to the stories to recognize what Gennette has done. It’s not in the numbers. It’s not in the four walls of the spreadsheet. It’s about good-looking merchandise.”
In July, Gennette told Fortune that the company still has “a long way to go.”
“For us, the ultimate measure of this, is going to be, do we have engaged customers who are spending more with our brand and is our brand attractive that it’s getting new customers?”
Net income for the second quarter ended Aug. 4 was $166 million, or 53 cents a share, compared with $111 million, or 36 cents a share, a year earlier. Excluding one-time items, Macy’s earned 70 cents per share, far exceeding analysts’ expectations for 51 cents a share, according to a poll by Thomson Reuters.
“The combination of healthy stores, robust e-commerce and a great mobile experience is Macy’s recipe for success,” Gennette said in the company’s earnings release. “We are focused on improving our customer journey every step of the way because we know that our customers expect a great experience whenever and wherever they engage with our brands.”
The company also continues to be disciplined with inventory management, “which allows us to give our customers more fashion and freshness, while increasing sales and improving gross margin,” he said.
For fiscal 2018, Macy’s now expects adjusted earnings per diluted share of $3.95 to $4.15, excluding anticipated settlement charges related to the company’s defined benefit plans as well as impairment and other costs.
“Our strategic initiatives are gaining traction,” Gennette said. “They contributed to our first half results and will continue to have a positive impact on our performance in the back half of the year. This, combined with continued strong execution and a healthy consumer spending environment, gives us confidence to raise sales and earnings guidance for fiscal 2018.” “We have momentum in the business, powered by our 130,000 colleagues who are focused on how best to serve our customers every day,” he added.
He’s No. 103 on Chief Executive and RHR International’s CEO1000 Tracker, a ranking of the top 1,000 public/private companies.
Jeffrey Gennette, Chairman & CEO, Macy’s Inc.
Headquarters: Cincinnati, OH
Education: Stanford University
First joined company: 1983
Positions prior to being named CEO: Chairman & CEO of Macy’s West
Named CEO: 2017