Dive Brief:
- Former Bloomingdale’s CEO Tony Spring officially took over as CEO of Macy’s Inc. on Sunday, succeeding Jeff Gennette, who is retiring from the retailer after 40 years, Macy’s said Friday. The company first announced the leadership transition last March.
- While serving as CEO-elect last year, Spring, who spent 36 years at Bloomingdale’s, led the company’s overall digital, customer, merchandising and brand teams, along with the Bloomingdale’s and Bluemercury banners.
- Gennette will stay with the company as board chair until Macy’s annual meeting. Spring will become board chair at that time, the retailer said.
Dive Insight:
Spring takes the helm of a company with 722 retail locations between its namesake, Bloomingdale's and Bluemercury banners.
“I am excited to take on the role of CEO of Macy’s, Inc. and to apply my over three decades of experience with our nameplates to build on this strong foundation and lead our company forward,” Spring said in a statement. “Alongside the Macy’s, Inc. leadership team, we will remain focused on driving innovation, fostering profitable sales growth and delivering value for our shareholders, while strengthening our position as our customers’ trusted source for quality brands.”
The retailer faces several challenges. They include a $5.8 billion offer in December from two of its investors, Arkhouse Management and Brigade Capital Management, to take the company private. Macy’s rejected the offer last month. Also in January, the retailer confirmed it would move to cut its workforce by 3.5% and planned to close five full-line mall-based Macy’s anchor stores. Macy’s is among several mall-based retailers that are looking to retail locations outside of malls for lower rent and more operational flexibility.
“When he takes over as CEO, Tony Spring will inherit a business that has a lot of problems and lacks a coherent plan to tackle them,” Neil Saunders, managing director of GlobalData, said in an email to sister publication Retail Dive.
Saunders said Spring faces a lot of decisions regarding issues like developing smaller stores, private label evolution, omnichannel investments and what the store portfolio should look like. As Spring steps up to lead the company, Saunders said the new CEO can choose to break with the past and remake Macy’s or he can continue “tinkering around the edges which, ultimately, will result in the continued decline of the chain.”
Gennette served as CEO since 2017 and succeeded Terry Lundgren, who led Macy’s for over a decade. He lauded Spring’s success during his leadership tenure at Bloomingdale’s and Bluemercury.
“In addition to building brands and consistently innovating for the customer, Tony has strengthened our culture through his leadership and is committed to talent development,” Gennette said. “It’s been a privilege to serve Macy’s, Inc. over the past 40 years and I’m proud of the exceptional work of our colleagues in serving our customers and continuing to strengthen the company’s operational and financial foundation.”
During the third quarter, Macy’s net sales dropped 7.1% year over year to $4.9 billion. Comparable store sales at the company’s namesake banner fell 6.7% and they dropped 4.4% at Bloomingdales, but rose 2.5% at Bluemercury. Digital sales in Q3 fell 7% year over year.
“We have a balanced portfolio of nameplates, each with its own identity,” Spring said during the Q3 earnings call, according to a transcript from The Motley Fool. “This is a distinct advantage. We can learn from each other without becoming one another as we remove silos to optimize our collective customer insights.” Spring added that the company is pairing human judgment with data science, including artificial intelligence, to drive more accurate, agile, customer-influenced decision-making.
Saunders said one of the upcoming decisions includes how Macy’s will respond to Arkhouse. The investment group said it has financing in place to take the company private and is still pressing the company to open talks about its offer, CNBC reported.
“Tony Spring’s tenure starts during a challenging period as not only does Macy’s face many difficulties, it is also operating in an environment where consumer spend is slowing, especially in discretionary categories,” Saunders said. “This makes his job a bit like running up a down escalator that is on super-speed mode.”
