Amidst an uneven economic recovery and cautious consumer
behavior, retailers are leaving no stone unturned to keep
themselves on the growth trajectory, and
) is just doing exactly the same, to keep up in the race of the
"Survival of the Fittest." This is evident from its recently
announced venture with the premium athletic shoes, apparel and
The Finish Line Inc.
Finish Line, which will become an exclusive athletic footwear
partner of Macy's, will operate through the latter's 450 plus
locations as leased departments against a licensing fee, with
rollout commencing in Spring 2013 and to be finished by Fall 2014.
Additionally, Finish Line would manage Macy's footwear collections
and stock across 225 outlets starting in Spring 2013.
The deal seems to be profitable for both the parties. The
addition of branded Finish Line products in the kitty will assist
Macy's in becoming a favorite destination for exclusive footwear
collections, apart from its apparel, cosmetics and home furnishings
offerings. This would help it to attract traffic both in stores and
On the other hand, Macy's presence will facilitate Finish Line
to tap under penetrated markets and enhance its customer base. The
deal is expected to augment Finish Line's top line by $250 million
to $350 million annually in the long run. Currently, Finish Line
operates 638 stores in malls.
The store-within-store concept is not new.
J. C. Penney Company Inc.
) operates in-store Sephora departments, and has also incorporated
stores of MNG by Mango and Call It Spring by The ALDO Group in its
Macy's departmental stores sell a wide range of merchandise. Its
products include men's, women's, and children's apparel and
accessories, cosmetics, home furnishings and other consumer
In an attempt to increase sales, profitability and cash flow,
the company has been taking steps such as integration of
operations, consolidation of divisions, customer-centric
localization initiatives, as well as developing e-commerce business
and online order fulfillment centers. Moreover, Macy's continues to
focus on price optimization, inventory management and merchandise
planning to drive traffic.
However, the company's customers remain sensitive to
macroeconomic factors including interest rate hikes, increase in
fuel and energy costs, credit availability, unemployment levels and
high household debt levels, which may negatively impact their
discretionary spending, and in turn the company's growth and
Macy's, which competes with
), currently operates approximately 840 department stores in 45
states, the District of Columbia, Guam and Puerto Rico.
Currently, we have a long-term Neutral recommendation on the
stock. However, Macy's holds a Zacks #2 Rank that translates into a
short-term Buy rating, and well defines its relentless endeavors to
combat an economy that still lacks luster.
DILLARDS INC-A (DDS): Free Stock Analysis
FINISH LINE-CLA (FINL): Free Stock Analysis
PENNEY (JC) INC (JCP): Free Stock Analysis
MACYS INC (M): Free Stock Analysis Report
SAKS INC (SKS): Free Stock Analysis Report
To read this article on Zacks.com click here.