Macy's plots Bluemercury expansion
Macy’s is accelerating the expansion of its Bluemercury beauty banner, with plans for 30 standalone stores and shops-in-shop in Macy’s stores in 2019, Bloomberg reports. As of May 5, Macy’s operates 159 Bluemercury locations (139 freestanding and 20 inside Macy's stores), according to a June 1 filing with the Securities and Exchange Commission.
That’s on top of the 25 stores opening this year. Two opened in the first quarter and 23 are planned, CEO Jeff Gennette told analysts in a conference call in May, according to a transcript from Seeking Alpha.
Macy’s acquired the high-end beauty and spa retailer in 2015 for $210 million in cash. Macy's didn't immediately return Retail Dive's request for more details.
For years now department stores have ceded market share to specialty beauty retailers like Sephora and Ulta and online subscription startups like Birchbox, allowing one of their last remaining non-apparel categories to languish.
But Macy's is fighting back, not just with this expansion of the Bluemercury banner but also stronger beauty departments that take a page from disrupters in the space. The retailer is offering a Macy's Beauty Box for $15 a month, introduced new assortments in stores and hired beauty advisors, in a departure from the traditional brand-based sales, to sell across all brands and categories.
"Bluemercury ... [is] a small part of our business, but it's growing at a rapid pace," Gennette told analysts in May. "They launched a number of new products under their private labels, Lune and Aster and M-61, which have performed well."
Such moves are long in coming but absolutely necessary. LVMN-owned Sephora years ago sparked the disruption of the old-school beauty counter in Europe, sweeping away the controlled, compartmentalized experience with a more democratic display of high-end cosmetics, self-service trials and expert, brand-agnostic staff, before bringing it to the U.S. Mass merchants like Target, which has revamped merchandising and added its own human and virtual beauty advisors, are now also stoking the competition.
Macy's executives list Bluemercury as a third pedestal in its stable, along with the flagship Macy's and Bloomingdale's. But the spa banner remains tiny and expansion is key if it's to effectively counter the massive and growing presence of the specialty businesses. Sephora in particular is hardly complacent, introducing new store formats and innovations, including 2015's Beauty TIP Workshop (launched three years ago) and Sephora Studio (opened last year), tech-heavy concepts that keep the customer at the forefront. Meanwhile, that company's Innovation Lab and push into in-store technology shows the retailer is determined to keep customers' attention.
- Retail Dive 30 minutes with Bluemercury's co-founder
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