Macy’s CEO Says Belt-Tightening Isn’t Hitting Luxury, Work Wear

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Macy’s CEO Says Belt-Tightening Isn’t Hitting Luxury, Work Wear
Credit: © Reuters.

(Bloomberg) -- Consumers are still turning to Macy’s Inc. for work wear and luxury goods even as inflation puts pressure on household budgets, Chief Executive Officer Jeff Gennette said.

The company lowered its outlook for full-year sales and earnings on Tuesday as higher prices for gas and groceries curtail discretionary spending in some categories, including casual athletic clothing and home items that were popular during the pandemic.

But some Macy’s segments remain strong, Gennette said. Shoppers are still looking for items such as dresses, office clothes and tailored sportswear. Demand for higher-end products has also held up. That bodes well for the upcoming holiday season, he said.

“I’ve got some categories where there’s a glut of inventory in the industry,” Gennette said in an interview. “But I also have categories that are flying right now.”

Macy’s shares rose as much as 8.8%, paring a recent slump. The stock has fallen 24% since the beginning of the year.

Same-stores sales declined last quarter at Macy’s eponymous stores, but they rose at Bloomingdale’s, a department-store chain that caters to high-end shoppers, and Bluemercury, an upscale beauty brand that the retailer also owns.

Gennette said the amount of shopping taking place at brick-and-mortar stores caught Macy’s by surprise last quarter. The company is still “very bullish about digital growth” but it’s less of a driver than originally expected, he said.

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© Bloomberg. Jeff Gennette, chief executive officer of Macy's Inc., outside the company's flagship store in New York, U.S., on Wednesday, May 12, 2021. Gennette said he's still committed to building a multi-billion-dollar skyscraper atop the company's Herald Square flagship, plans that city officials, developers and the retail industry thought the pandemic might force him to scrap.

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