Macy's Millennial Strategy - Analyst Blog

The holiday season is just around the corner, and retailers are gearing up to woo consumers during the busiest time of the year. With the economy still not completely out of the recessionary phase and consumer behavior still cautious, retailers are using tactical strategies to keep themselves on the growth trajectory. Macy's Inc.(M) is doing exactly the same, to keep up in the race of the 'Survival of the Fittest', as it unveils its "millennial strategy".

Macy's is all set to introduce 13 new brands and expand 11 brands that are part of its current portfolio. These brands will be showcased at mstylelab stores, targeting customers in the age bracket of 13 to 22, and Impulse departments, principally catering to consumers in the age group of 19 to 30. The company's "millennial strategy" aims at tapping the young demographics of America, who are trendier and fashion oriented, and by the end of 2013, Macy's expects to attain a complete makeover.

The new brands in the pipeline are Marilyn Monroe, MADE Fashion Week, Keds, Blossom & Clover, Truth or Dare, G-Star Raw, Ambiguous, Ezekiel Clothing, COMUNE, DTA, Fatal Clothing, Plan B and Argyleculture. The existing brands to be enhanced include RACHEL Rachel Roy, else, kensie, DV by Dolce Vita, Material Girl, American Rag, Inglot Cosmetics, Smashbox Cosmetics, Kipling, Steve Madden Handbags and Stussy.

Earlier, Macy's entered into a venture with the premium athletic shoes, apparel and accessories retailer, The Finish Line Inc. ( FINL ).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.

With store traffic expected to increase on the back of regained consumer confidence and the initiatives undertaken, Macy's is on a seasonal hiring spree. The Cincinnati-based company earlier hinted at deploying approximately 80,000 seasonal staff for its Macy's and Bloomingdale's outlets, call centers, distribution centers and online fulfillment centers, portraying a 2.5% rise from the last year, when the retailer appointed about 78,000 associates.

It seems that Macy's is efficiently doing its homework and intends to leave no stone unturned to have a greater share of the pie in the upcoming holiday season.

Currently, we have a long-term "Neutral" recommendation on the stock. However, Macy's, which competes with Dillard's Inc. ( DDS ) and Saks Incorporated ( SKS ), 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 Report

FINISH LINE-CLA (FINL): Free Stock Analysis Report

MACYS INC (M): Free Stock Analysis Report

SAKS INC (SKS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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