Respected retail analyst Neil Saunders had for years regularly posted pictures on social media showing extreme messiness at Macy\u2019s stores\u2014mounds of unfolded sweaters strewn on the floor or shelving that had fallen into disrepair\u2014on social media. Now he was getting an individual tour from the department store\u2019s new CEO, Tony Spring.<\/p>\n
At the well-appointed Macy\u2019s in the upscale Topanga Westfield mall in Los Angeles in June 2024, Spring walked the brand\u2019s former b\u00eate noire through the improvements he was starting to roll out at 125 \u201cpriority\u201d stores: elegantly styled mannequins and more staffers in key areas; double the staffing in the women\u2019s shoe department; and three times as many in the dresses area. There were even live human beings manning the fitting rooms.<\/p>\n
Saunders had to admit, he was impressed. \u201cTheir merchandising is sharper,\u201d Saunders told Fortune. \u201cThere is greater neatness on the shop floor. They\u2019re starting to elevate the shopping experience.\u201d<\/p>\n
But perhaps the biggest change Saunders saw, he told Fortune, was Spring\u2019s openness to criticism\u2014as shown by his willingness to engage with one of the brand\u2019s harshest critics. \u201cThis was a really big sea change,\u201d Saunders said.<\/p>\n
It\u2019s an attitude the CEO himself sees as essential for the 167-year-old retailer to carve out a new place for itself in today\u2019s retail world.<\/p>\n
\u201cNeil didn\u2019t take pictures of things that didn\u2019t exist,\u201d Spring told Fortune in an interview at Macy\u2019s headquarters in New York. The venerable department store had long been in denial about the depth of its problems, said Spring, who took the reins of Macy\u2019s Inc in early 2024 after a successful decade-long stint as CEO of its Bloomingdale\u2019s division.<\/p>\n
\u201cWe had to have a moment of reflection and say, \u2018We\u2019re not as good as we think we are,\u2019\u201d Spring said. \u201cWe can be proud of Macy\u2019s history, but we can\u2019t be proud of Macy\u2019s current performance.\u201d<\/p>\n
Indeed, the brand\u2019s performance was awful for years. Customer service scores dropped year after year, contributing to sales falling from an all-time high in 2014 of $28.1 billion to just above $22.3 billion a decade later. The company has closed hundreds of stores because customers took their business elsewhere amid the \u201cretail apocalypse\u201d set off by the rise of Amazon<\/a> and the soaring popularity of cheaper retailers such as Target<\/a>. Meanwhile, brands trying to elevate their own images were tiring of the subpar presentation their products had at many Macy\u2019s stores: Ralph Lauren<\/a>, Coach, Nike<\/a>, and Levi\u2019s, among others, took their products off the shelves.<\/p>\n Spring\u2019s plan is simple in its essence: Go back to retail fundamentals. That means sufficient staffing to ensure the customer service that justifies shopping at a department store instead of online or at a discounter; well-maintained stores with more visually appealing product presentation; and newer brands rather than the same-old, same-old, over and over again\u2014all while keeping costs down. Ultimately, his strategy aims for a Macy\u2019s with fewer but more appealing stores, complemented by e-commerce. The goal is to go to from the current 449 locations, to 350 or so, including the 125 priority stores that will get disproportionately higher investment for things like more staffing and new lighting.<\/p>\n There are promising signs that, at very long last, Macy\u2019s has found a turnaround plan that is taking. Last quarter, Macy\u2019s reported its best comparable sales performance in 12 quarters. Sales only rose 1.1% year-over-year but that\u2019s a victory at a time shoppers are hamstrung by economic anxiety\u2014and an encouraging sign that Spring might be onto something.<\/p>\n Attitude adjustment<\/p>\n To have any hope of a successful turnaround, Spring felt that Macy\u2019s needed a cultural reset first, to inspire a workforce battered by years of falling revenue, store closings, and staff reductions, and get buy-in to his strategy. \u201cThe big impact we\u2019re finally seeing comes from the fact that we\u2019re all singing from the same hymnal,\u201d said the 57-year-old Spring.<\/p>\n Macy\u2019s, founded in New York City in 1858, benefits from a huge reservoir of goodwill among its 40 million annual customers, many of whom remember trips to the department store as kids, to get outfits for their graduations or to sit on Santa\u2019s knee. The Macy\u2019s Thanksgiving Day parade in Manhattan, watched by millions around the country on TV every year, has cemented the brand\u2019s place in American culture.<\/p>\n But while many associate the brand with its Manhattan flagship and its famously elaborate window displays during the holiday season, Macy\u2019s has for decades been primarily a mall-based department store chain with hundreds of large emporia in suburbs across the country. It\u2019s a shopping format consumer have been shifting away from since the 1990\u2019s\u2014and Macy\u2019s is no exception.<\/p>\n At its peak just over a decade ago, Macy\u2019s had more than 773 namesake stores. The company, which also owns Bloomingdale\u2019s and the beauty chain Bluemercury, became a Frankenstein behemoth after a $11 billion mega-merger in 2006 in which it absorbed several regional chains, including Filene\u2019s, Marshall Field\u2019s, Foley\u2019s, Hecht\u2019s, and Kaufmann\u2019s and slapped the name \u201cMacy\u2019s\u201d on all the stores. That mega deal also led to a massive challenge for Macy\u2019s: Too many of the brand\u2019s stores were clustered together, cannibalizing each other\u2019s customer base.<\/p>\n Over that period, Macy\u2019s bureaucracy swelled, and the individuality of the regional department store chains it had absorbed faded.<\/p>\n \u201cThey didn\u2019t ever manage to create one unifying culture from all these parts they mushed together,\u201d said Kathy Gersch, president of the consulting firm Kotter International.<\/p>\n In addition to the \u201cpriority\u201d stores, Macy\u2019s will keep open another 225 stores or so once it is done closing a few dozen more locations in the next few years.<\/p>\n