Macy's Cost Structure

Dillard 's finds itself with a multitude of competitors in the retail space--Nordstrom, Saks, Macy 's, JCPenney. Dillard 's reported a revenue of $1.46 billion for the financial quarter ending in October 2014, Dillard 's saw a noticeable shift, nearly doubling its market share among the Macy 's typical shoppers in the nine months after stores shut their doors,” said Sarah Spagnolo of Foursquare. She noted that Dillard 's saw an 88% increase in market share. A Dillard 's spokesman said the company does not disclose revenue from its e-commerce initiatives. According to Thomson Reuters, the company is expected to report a revenue of $2.08 billion for the fourth quarter, and $6.65 billion in revenue for the financial year. This strong point says that Dillard 's is achieving a high turnover revenue in retailer market recently. According to Thomson Reuters, the company is expected to report a revenue of $2.08 billion for the fourth quarter, and $6.65 billion in revenue for the financial year. Dillard is a younger brand than Macy, Nordstrom, but Dillard 's has taken a successful step to create a good significant position in customer mind in a short time.

Macy operates in department store retail industry. The U.S. Department Store industry includes over 3500 stores with combined annual revenue of $70 billion representing 20% of the global industry. Department stores in the US increased at a compounded annual growth rate (CAGR) of 3.4% between 2004 and 2009. The US Department store product mix includes a variety of products such as women, men, and children apparel, shoes, cosmetics, and home and furniture. Clothing and footwear market sales accounted for a 53% share of the department stores retail format in 2009 (DataMonitor).

Due to the economy downturn period, Macy’s and many other retailers were suffering. Fortunately, Macy’s has chosen the beneficial marketing strategy to fit the objective of business. This paper will analyze the company’s situation from its financial aspect, industry aspect, the competitive part and Macy’s marketing strategies to conclude that Macy’s could have stable profit in the next three to five years.

Unlike Starbucks, Macy’s is not doing very well, as evidenced by the fact they announced last month the impeding closure of 68 stores (Peterson, 2017). The company has been struggling for a few years with the growth of the internet and online businesses such as Amazon making their brick and mortar stores impractical in modern times. While the number of stores may not seem like as much of a problem as it is, as other companies have had to close down more in recent years or go out of business in general, this is a symptom of larger problems in both the company and the industry.

Macy’s Inc. ratio was .02 and JC Penny Co. Inc. was .00. To improve this ratio, both companies need to improve on their net income. If JC Penny doesn’t continue to improve its net income, then this ratio will begin to lean negative, signaling the company is losing money for every dollar is sales and may not be good investment. Macy’s Inc. still has room before it hits .00, however, if their net income continues to fall, they soon too may have the same profit margin ratio as JC Penny Co. Inc. Shutting down unsatisfactory stores – as each company is doing – may help improve this ratio as well. With less funding going to these stores, such as salary’s, rent, and wasted inventory, they will be able to improve their net income value.

The purpose of this paper is to do a value chain analysis of Costco, identify their resources and capabilities, to conduct a SWOT analysis to identify the opportunities in which they are lagging and to form a strategy to move forward using the recourses and capabilities in the direction of utilizing those opportunities.

The industry we have chosen is the department store-retail industry. Within this industry, we have chosen the department stores of JCPenney and Macy’s. We find this industry, as well as these two companies, interesting from a strategic perspective. JCPenney has recently undergone a massive strategic restructuring in regards to its pricing, brand offerings, and store layout, pushing it away from the typical department store strategy of discounts and coupons. Its new strategy has become much closer to Wal-Mart’s strategy of every day low prices. Macy’s, on the other hand, has restructured with a push from the economic

This report presents data describing the differences amongst the two department stores, their fundamental visions, and comparative statistics. Macy’s or Dillard’s: Differences amongst these competitors There are several aspects you can analyze from each department store. Major pieces do set each one apart from the other. Brand names carried by Macy’s and Dillard’s from an average shoppers point of view can go completely unnoticed unless price is involved. For trend shoppers brand names can either make or break a retail store. It can easily determine if he or she will walk to Macy’s or Dillard’s because they already know the store does or does not carry that brand. This is consistent with each department throughout both stores and

The recent recession in 2016 has impacted Macy’s negatively because many shoppers have neglected full price stores and shop at discount stores, such as Marshalls, and TJ Maxx. According to Market’s Insider, “Macy's CEO Terry Lundgren acknowledged this trend last year and said on an earnings call that consumers — and especially millennials — are migrating toward lower-priced discount stores”. According to Business of Fashion, Customers also are gravitating toward online shopping, where you can compare all options to find the best one. Consumers are now driven by price and style, not necessarily the brand, which has created less loyalty among customers. Overall, consumers aren’t shopping as much as they used to. According to Business of Fashion,

The annual report and 10-K filings were obtained from macys.com. The financial statements included in the annual report are as follows: consolidated statements of operations, consolidated balance sheets, consolidated statements of changes in shareholders’ equity, consolidated statement of cash flows, and notes to consolidated financial statements. In the report, Macy’s Inc. recognizes several competitors which are Bed Bath & Beyond, Belk, Bon Ton, Burlington Coat Factory, Dillard’s, Gap, J.C. Penney, Kohl’s, Limited, Lord & Taylor, Neiman Marcus, Nordstrom, Saks, Sears, Target, TJ Maxx and Wal-Mart. The top three

Macy’s Inc. has a very strong network all over in the United States under its two main brand names but the company has very weak geographic presence. All of its business functions are in the United States. Any changes in the economic, political, legal, and social framework of the country will have direct impact on the business operations of Macy’s Inc. and its profitability will suffer many folds.

This has significantly affected the company’s performance. Therefore, 18 out of 22 analysts (about 82%) has rated Macy’s stock as “Hold” and 4 out of 22 has rated it as “Buy”. Not a single analyst has rated it as “Sell” (Bailey, 2017). In addition, Macy’s is in a phase of restructuring its real estate to strengthen the financial health. Further, Macy’s stock price has fallen to 21.1% as compared to the last year (Bailey, 2017). Like Macy’s, its peers (Nordstrom, Kohl’s and JCPenney) are also exhibiting weakness in their sells and their stock price has dropped significantly. However, due to strong fundamental and its recent restructuring plan, analysts are expecting that the financial condition of Macy’s will improve. Right now, the average 12-month price target for Macy’s is about $35.20, which is about 24.5% of the current stock price. Hence, it can be affirmed from this article that the company’s stakeholders have certainly faced some downfall in recent years, however, Macy’s financial health will improve in upcoming years and it is suggestable to hold on to Macy’s

J.C. Penney is a chain department store that provides plentiful materials and food and provides its customers with services, such as styling salon, optical, portrait photography, and custom decorating in the United States. As a well-known department store, J.C. Penney, it is a leading department store retailer of apparel, accessories and home furnishings. But from the beginning of March to the end of May, JCP stock has been generally falling in price. According to a recent research from Green Street Advisors, they thought the American shopping malls were declining at a scary rate. Now, it comes out clearer from the data of the stocks. From looking at J.C. Penney stock, it is evident from that stock going down that J.C.

To increase the e-commerce dominance, J.C.Penney needs to focus on improving the user experience and the quality of its website and app. At the same time, J.C.Penney should bring up more sale events and exclusive products online to attract more customers. We recommend J.C.Penney to use the SWOT analysis. It can help J.C.Penney clearly identify its strengths, opportunities, at the same time find out the weaknesses and threats. J.C.Penney’s e-commerce strategies can be made or modified based on the SWOT analysis.

John Lewis is a British department store that operates in the United Kindom and is well known for its ‘Never Knowingly Undersold’ policy that brings quality products to the UK high streets and online shopping. A SWOT analysis is intended to analyse the organisation 's current status and its potential for the future. Morrison (2011, p. 158) states that a “SWOT analysis is a strategic tool used by businesses to assess the organisation 's strengths, weaknesses, opportunities and threats.” Using a SWOT analysis will encompass a detailed evaluation of the organisation for John Lewis, which could be used to benefit the company in the future. As Wetherly & Otter (2008, pp. 24-25) says “The capacity of a business to take advantage of opportunities and resist threats will depend on its internal strengths and weaknesses.” But if John Lewis has the internal strengths to undertake a change a SWOT analysis will help as it was “designed to enable an organisation to take into account internal and external factors that may affect its strategic planning decisions and thus improve its prospects of success” (Harrison, 2014, p. 6).