>>Sapna Maheshwari, The New York Times
Published: 2021-02-24 03:04:20 BdST
The retailer swung to a net loss of $3.9 billion for the year that ended Jan 31, from a $564 million profit the prior year. But the company said it “anticipates 2021 as a recovery and rebuilding year,” with momentum building in the second half, particularly after a better than expected fourth quarter and holiday selling season, which was profitable even as sales dropped by 19 percent from the same period a year earlier.
With more than 700 stores, Macy’s is often viewed as a barometre for the health of department stores, malls and American consumers. On Tuesday, executives emphasized that Macy’s was building out its digital business, which it expects to reach $10 billion in sales in the next three years, moving out of lower-performing US malls and expanding its off-price chains like Macy’s Backstage, which aims to compete with TJ Maxx and Nordstrom Rack. It is also testing stores away from malls.
Although the company’s sales have jumped in areas like home, luxury skin care and fragrances, “all of apparel remains challenged,” Jeff Gennette, Macy’s chief executive, said on an earnings call Tuesday. “While we are doing well in the casual categories, the dress categories remain depressed.”
Gennette said that Macy’s had a “ramp-up” strategy with vendors to lean into new inventory, if the company sees signs of improvement as vaccinations start to scale and customers start booking events like weddings again.
Even before the pandemic hit, Macy’s was under strain. In February 2020, the company, which is based in New York City, said that it planned to close about 125 of its least productive stores over three years and cut about 2,000 corporate and support function positions. Sales in 2019 had fallen to $24.6 billion from $25 billion a year earlier, and the company’s declining stock led to its removal from the S&P 500 last year.
Many consumers stayed away from malls and department stores in the past year and bought far less apparel in a newly isolated world. Macy’s place in American culture also took a hit, as the outbreak reduced its annual fireworks display and Thanksgiving Day parade in New York City.
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