Buyers abandon Macy's, the data show - this is why
The department store giant provides lower expenses for the rest of 2023.
While Macy's is known for its one -stop shop in its giant department stores, the company has actively been change over time . The retailer is Close its anchor stores at the shopping center And open smaller stores (called Bloombie's and Market by Macy's) to attract younger crowds, while refining its inventory. But while Macy's refreshes its image, the company has trouble maintaining its customers, according to newly published data. Read more to find out why buyers abandon Macy's.
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Macy beat expectations, but sales are down.
In a press release of August 22 describing its Second trimester results , Macy announced that it was better than Wall Street was planning, but income has been down compared to previous years. According to the press release, net sales fell 8%, sales of brick and mortar fell 8% and digital sales fell 10% compared to the same quarter in 2022.
The company retains a cautious perspective for the rest of 2023, because it provides that sales will continue to drop - and the CEO Jeff Gennette offered an overview of the reason why it is.
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Buyers are "under pressure," said the CEO.
In the press release, Gennette cited "uncertainty" associated with the economy, also telling CNBC that "the consumer continues to be under pressure . ""
As Reuters reported, the retailer warned that people spend less During the second half, even during the holiday shopping season - as consumers are in difficulty and less focused on discretionary purchases. Reuters noted that Macy's has a decrease in the demand for intermediate income buyers, who do not collect new handbags and clothes due to continuous inflation.
Instead of going to Macy's, Gennette told CNBC that buyers invest in experiences and were preparing in the fall, when payment of student loans returns.
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People are unable to pay their credit card invoices.
Illustrating the financial problems of consumers, Macy's has also reported an increase in customers who cannot make their payments by credit card. An increase was expected after the Pandemic COVID-19, but according to Macy leaders, they did not predict that delinquations would increase this quickly. AE0FCC31AE342FD3A1346EBB1F342FCB
"The speed at which the increase occurred for us and the wider industry of credit cards ... was faster than expected", " Adrian Mitchell , The director of operation of Macy and the financial director, told analysts profit call Yesterday, by CNN.
According to the press release, the rise in delinquencies was the main engine of a drop of $ 84 million in revenue for the company.
"I think that the income of the credit card is an indication of some of the pressures that we really see on the consumer," said Mitchell, according to CNN. "These are credit card sales, these are student loans that we know that we are going to focus on the month or the next two car loans, mortgages."
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Macy's strategically addresses the situation.
Gennette told CNBC that the company made changes to attract customers. Managers focus on storing items that buyers want to buy, in particular perfumes and beauty products. Macy's also brings back under the brands of armor and Nike, which have not been available in recent years.
"We are entering areas of interest," Gennette told CNBC. "We are shooting on categories that do not work. So we are ready for the rear half [of the year] to respond to the consumer where and when they buy."
