Audit Integrity recently listed Macy’s as one of the top twenty corporations that are on the road towards bankruptcy over the next year. As a political advisor, I need to have familiarity with all areas of business. This expertise has led me to offer this list of options that needs to be considered to avoid a Macy’s bankruptcy.
Macy’s Needs to Change Commercial Targeting
Even though there has been a trend away from name-brand purchasing in the last five years (and more so since the crash of the financial markets), Macy’s continues to market their top name-brand lines. The Macy’s commercials are pushing the likes of Martha Stewart, Donald Trump, and Jessica Simpson. This distances them from the current average shopper that has kept the Macy’s name going for 150 years. This presses a Macy’s bankruptcy.
Instead, like much of it’s competition, Macy’s needs to start focusing on some of the quality deals that a shopper might find in their stores. Instead of name-brand clothing, Macy’s should be focusing on the overall quality of the merchandise that can be purchased in their stores. Continuing the older marketing methods will quickly lead to a Macy’s bankruptcy.
With over $2.4 billion in maturing debt, Macy’s needs to focus on the debt reduction and debt elimination, otherwise, we will soon see a Macy’s bankruptcy. Macy’s is trying to focus on cost reduction (as shown by their recent cutting of their stock dividend), which is good. On the flipside, though, they should be spending time with their debtors and working on restructuring their debt.
Macy’s has always been known for being a market leader in the amount of interest that is charged on their in-store credit card. At over 24%, less and less customers are using their Macy’s charges. The current market is trending away from credit card use as a whole. By a sharp reduction in their interest rate, Macy’s will have an increase in the usage and interest payments that cause for a huge influx of cash on hand. Higher cash on hand leads to higher stock prices which fund the company, and will push off a Macy’s bankruptcy.
Bring Back Marshall Field’s and Hudson’s
The Midwest was built on the backs of two regional retailers. Marshall Field’s was the mainstay of the Chicago area, and Hudson’s was the star of the Detroit area. When the Hudson’s name was changed to Marshall Fields half a decade ago, sales slumped because the brand-name that the Detroit area was so familiar with went away. So to, when Macy’s purchased these stores, the names were all changed to Macy’s. This has led to massive boycotts and protests in both the Chicago area, and the Detroit area.
By changing the names of at least one or two of the local Chicago and Detroit Macy’s back to Marshall Field’s and Hudson’s, these protestors will fall to the wayside. The reintroduction of the old store names will placate many of the naysayers and bring many of the customers back into now-failing stores. Yet another step away from a Macy’s bankruptcy/
A Macy’s bankruptcy would possibly kill the market for department stores. It would quickly lose the support of many customers and investors. By following these steps, a Macy’s bankruptcy could go from an impending nightmare, to a nightmare about what could have been.
Protesters: Give Chicagoans what they want – Field’s, Skyline-Chicago.com, November 30, 2006
Macy’s will not provide sales figures for former Marshall Field’s stores, but admits that reports that sales are down at former Field’s stores, particularly at the flagship store at 111 North State Street – Slow Sales At Converted Marshall Field’s Stores, NBC5.com, December 13, 2006