Macy’s will continue its plans this year integrating new strategies in omnichannel, localized merchandise assortments and marketing. These strategies will continue to be integrated in both Macy’s and Bloomingdale’s to meet customer demand.
Macy’s Omnichannel Outlook
In fiscal 2013, Macy’s Inc. announced it created the new senior executive position Chief Omnichannel Officer. Robert B. Harrison appointed the new position, reporting to Terry J. Lundgren, CEO of Macy’s Inc. Macy’s Robert B. Harrison will manage strategies to integrate bricks-and-mortar to online and mobile channels, working with logistics and related operations.“2012 was another great year in our company’s evolving story of growth. The numbers reflect our success in pursuing the right strategies, and executing them with conviction in every part of the business with a talented team we consider to be the best in retailing,” said Terry J. Lundgren, chairman, president and chief executive officer of Macy’s, Inc.
For the quarter, online sales at the company that also operates the Bloomingdale's chain of luxury stores, soared 47.7 percent. The retailer reported net income of $730 million, or $1.83 per share for the quarter that ended Feb. 2. Excluding pretax expenses, it earned $2.05 a share, while analysts, on average, were expecting $1.99 a share.
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Online sales for Macy’s surged 51.7% in December 2012. Total sales revenues grew to 7.2% to $9,350 million in the quarter from $8,724 million in the year-ago period. Macy's cash equivalents closed at $1,836 million, its long-term debt at $6,806 million. Macy’s currently operates approximately 840 department stores in 45 states, the District of Columbia, Guam and Puerto Rico.
Saks Omnichannel Outlook
Saks is about halfway through a three-year $100 million project to update its inventory management. Chief Executive Steve Sadove stated on a conference call to analysts "There's no question in my mind that omnichannel is the future of where retail is, that there is a brick-and-mortar play and a dot-com play." The retailer has had challenges in its past. Saks has closed 10 department stores since 2010 and is looking to shut a few more. It currently operates 43, in addition to its lower-priced Saks Off Fifth chain. The company also was affected by Hurricane Sandy with consumer spending.
Saks for the 14 weeks and 53 weeks ended February 2, 2013 compared to the 13 and 52 weeks ended January 28, 2012, total sales increased 5.6% for the fourth quarter and 4.4% for the full year. For the fourth quarter ended February 2, 2013, the Company recorded net income of $20.4 million.
Key Stock Data:
SKS has not issued dividends in more than 1 year.
27.26 Trailing 12 months
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Stephen Sadove, CEO stated “We posted a 0.7% comparable store sales gain in the fourth quarter, essentially in line with our expectation of relatively flat comparable store sales. This modest gain was on top of a very solid 7.7% comparable store sales increase in the fourth quarter of 2011. When including a number of stores that were indirectly affected by Sandy, Saks estimates that about 55% of its total revenue base was in some way hit by the multi-billion-dollar hurricane.”
Net capital expenditures were of approximately $140 million to $150 million for the full year. Approximately $75 million relates to Saks Fifth Avenue store renovations and new vendor shops, and approximately $55 million relates to Project Evolution and other information technology enhancements. The balance primarily relates to OFF 5TH and maintenance capital. The planned increase over the 2012 spending level of $115 million primarily relates to incremental Saks Fifth Avenue and OFF 5TH store renovations and information technology spending.
The new omnichannel consumers are able to research offers online, discuss information over video, have tablet access to sales associates from the stores, and have abilities to shop in real time or make payments using their mobile retail apps. Susan McPartlin, PwC’s US Retail & Consumer Sector leader states “As we enter an increasingly complex retail landscape with accelerating competitive pressures and digital shopping options, retailers will need to prepare for a wall-less omnichannel retail world, one where shoppers will come to expect a seamless brand experience online, in-store and across multimedia touch points. This multi-format portfolio combined with the proliferation of small, urban, alternative retail formats will pave the way for future growth, dismantling the mass homogenization and scale assumptions that propelled two decades of retail growth.” Mobile retailer apps popularity offered by the largest retailers increased 525 percent in December 2012 when compared with the previous year. More than 18 percent of consumers used a mobile device to visit a retail store and 13 percent used a smartphone or tablet to make a purchase. Over 95 percent of U.S. retailers have optimized their websites for smartphone traffic.
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Omnichannel is a priority initiative for leaders in 2013. Omnichannel objectives for both Macy’s and Saks will be the differentiation of its customer experience. Retailers will be investing in customer analytics, merchandising planning, and digital marketing technologies. Converged operations across mobile, social, ecommerce and store web based technology will be key and improvements in brand strength.