Dive Brief:
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Macy’s Wednesday reported another quarter of falling sales, with Q2 same-store sales dropping 2.1%, compared to an expected increase of .4%.
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But the retailer also outlined several steps it’s taking to get back on track, including tackling competition from the likes of T.J. Maxx with its own off-price “Backstage” stores, stepping up international growth, boosting its beauty retail through its Bluemercury arm, and strengthening its e-commerce.
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The retailer also explained why it dropped its Trump lines of merchandise, saying that it has a policy of not featuring goods affiliated with political candidates.
Dive Insight:
One of the curious things about Macy’s report Wednesday is that the company continues to bemoan that consumers aren’t buying what it’s selling, without much movement to shift its merchandising approach.
An exception is the retailer’s emphasis on its new Bluemercury beauty products and spa line, which capitalizes on the current strength of that retail sector.
Still, some of its efforts seem to be stymied by outside forces. Its moves to strengthen international sales with a partnership with Alibaba's Tmall Global, for example, could be hurt by a stumbling Chinese economy and this week’s double-devaluation of the yuan.
And while the company’s Backstage stores are a direct answer to the continued strength of TJX companies T.J. Maxx and Marshall’s, the move also carries the potential to undermine the company’s flagship Macy’s and Bloomingdale’s stores.
The mess the retailer finds itself in could lead it to give into investor pressure and leverage its real estate assets, a trend among many retail companies with significant properties in a high real estate market. The company is dipping its toe in that area by selling its downtown Brooklyn store and leasing back some floors.
Meanwhile, the retailer seemed to hedge its political bets by downplaying its move to discontinue Donald Trump’s line of business attire, scents, and accessories. CEO Terry Lundgren said the company has a policy of "not carrying any product from any candidate, ever."
"If Hillary Clinton had a handbag collection we won't carry that either," he told CNBC.
Lundgren didn’t address the tit-for-tat initiated by Trump, who has said that he was he who withdrew from Macy’s and called for a boycott of the retailer.
It’s no surprise when a retailer tries to take the high road in a spat with a public figure, though it may have missed an opportunity to condemn Trump’s remarks about Mexican immigrants, which have been widely panned by many from all over the political spectrum.