In efforts to boost lagging performance and be a more agile retailer, Macy’s has nabbed a former eBay executive as its new president, simplified its merchandising organization and enhanced focus on its data analytics capabilities. About 100 jobs will be eliminated as a result. Macy’s stock has plunged 45% this past year alone and adding an eBay executive to its ranks is surely a step to shore up its digital business.
The strategy is outlined below:
Hal Lawton Named President of Macy’s
Effective September 8, 2017, Hal Lawton will be the new president of Macy’s, responsible for merchandising, marketing, stores, operations, technology, and consumer insights and analytics. He will report to Macy’s CEO Jeff Gennette, the former Macy’s president. Lawton was most recently SVP of eBay North America, and brings his technology and digital expertise to Macy’s. Prior, he was at Home Depot and McKinsey & Company.
“Hal Lawton has deep expertise at the intersection of retail and technology, a diverse set of business experiences that give him a unique perspective, and a track record of successfully driving a change agenda at scale,” said Mr. Gennette. “This is a key step as we look to further transform the business and work through the volatility of today’s retail landscape. Macy’s already has one of the strongest omnichannel businesses in the industry, and with Hal on the team, we will accelerate the integration of digital both online and in our stores to deliver the world-class experience our customers demand.”
Lawton commented: “At a time when there is both dramatic change and great potential in retail, I’m excited to be part of the team that will shape the future of the Macy’s brand and, along with it, consumer expectations of what a great omnichannel experience can be.”
Improvements to Merchandising, Strengthened Consumer Insights and Data Analytics Capabilities
Macy’s is also restructuring its merchandising operations and strengthening consumer insights and data analytics capabilities.
The restructuring includes the consolidation of three functions – merchandising, planning and private brands – into a single Merchandising function to be led by Jeff Kantor and organized around five ‘families-of-business’ (Ready-to-Wear, Center Core, Beauty, Men’s and Kid’s, and Home).
“Macy’s best merchants will be in the right structure to operate at the speed of our customer and will be fueled by the power of data,” said Gennette. “Macy’s has long been known for innovation and excellence in merchandising. The changes we are making today maintain our core merchandising skills while massively simplifying our structure and processes for greater speed and flexibility. We are also further strengthening our consumer insights and data analytics capabilities so we can make better decisions faster, balancing the art and science of retail.”
“Exclusivity is a great customer loyalty tool, and we plan to grow that offering to 40% of our business. Having a single lens for each family-of-business will allow us to expedite our strategy of delivering this edited, elevated and exclusive assortment to our best customers. To achieve this, we will aggressively grow our private brands while also offering the best national brands,” continued Gennette.
Mr. Kantor is a 35-year Macy’s veteran, with extensive experience in merchandising and stores, including overseeing macys.com. Currently, Mr. Kantor serves as chief stores and human resources officer. Mr. Kantor will report to Mr. Lawton.
While the restructuring is focused primarily on growth, Macy’s projects savings of approximately $30 million on an annual basis, some used for reinvestment. Macy’s anticipates savings of approximately $5 million or approximately 1 cent per share in the fourth quarter of 2017, which is additive to previously provided earnings guidance.
The company also anticipates one-time costs of approximately $20 – $25 million associated with this restructuring, to be booked primarily in the third quarter of 2017.
All in all, Macy’s expects that these actions will result in a headcount reduction of approximately 100.