NEW YORK Across the country, Macys is ringing in this Christmas with local flavor, from Elvis ornaments in Tennessee to Texas-themed martini glasses.
These 2,200 themed ornaments and other decor sold locally for the holidays are vivid examples of how Macys Inc.s chairman, CEO and president Terry J. Lundgren, 58, is looking to harness the magic of the storied 152-year-old department store chain this Christmas and beyond.
Since its 2005 merger with May Department Store Co.s various regional nameplates, Lundgren has ditched storied names such as Marshall Fields to convert most stores to one national Macys brand.
But the chains latest shift emphasizes local stores roots by tailoring merchandise to local markets, he says.
Shoppers are now finding conservative suits in Washington, D.C., and large-size cookware in Utah to cater to larger families, for example. The strategy, rolled out last year to all its stores, has 1,600 district managers in 69 regional districts overseeing merchandise assortments in no more than 12 stores each.
Lundgren, a 35-year retail veteran, conceived of the changes, dubbed My Macys, as consumer spending was slowing down three years ago. But the financial meltdown made the top executive accelerate the move. That has helped the nations second-largest department store chain after Sears Holdings Corp. outperform competitors.
Lundgren expects the local strategy to help revenue at stores open at least a year rise as much as 3.5 percent in the second half. Based on stronger-than-expected October revenue, Macys raised its earnings forecast last week. The retailer is scheduled to report its third-quarter earnings Wednesday.
Lundgren also is focusing on Macys exclusive brands to help differentiate the chain from competitors. For the back-to-school season, Macys, based in Cincinnati, launched its Material Girl fashion collection, created by pop star Madonna and her daughter Lourdes, which has been a home run. The teen collection enhances Macys portfolio of celebrity brands, which include Martha Stewarts home furnishings collection, Donald Trumps ties and Tommy Hilfiger sportswear. Forty-two percent of its revenue comes from exclusive brands or store labels, Lundgren says.
Lundgren became CEO of Macys former parent Federated Department Stores Inc. in 2003. Two years later, he spearheaded the $17 billion acquisition of May, giving the company more than 800 stores.
Macys did away with Mays nameplates, from Hechts to Marshall Fields in 2006, causing some anger among shoppers who lost their favorite local store. Lundgren had to contend with protesters outside Marshall Fields store in Chicago, as well as anxious investors. But Lundgren held steadfast, proving them wrong.
Lundgren says Macys, which generated $23.5 billion in revenue in its latest fiscal year, is not only holding onto existing shoppers but grabbing more from rivals.
Lundgren says he draws the My Macys strategy from his experience as a china buyer at the former Bullocks chain in the 1970s, where he used to load up Lennox plates in his car trunk and travel to 18 stores in Southern California.