Is Macy’s Finally Ready to Take On China?

on August 27 2014 | in Fashion Retail | by | with No Comments

Macy's, China,

Macy’s has apparently set its sights on China in its ongoing efforts at international expansion.

Terry J. Lundgren, Macy’s chairman and chief executive officer, has been eyeing China for a while, planning on either opening a Macy’s department store or a series of specialty stores featuring popular in-house brands like Alfani, American Rag, Material Girl, Charter Club, and INC.

The company has been testing the Chinese market through e-commerce — initially through its macys.com website and then in 2012, through a partnership with Chinese e-commerce firm VIPStore, the operator of omei.com.

Now, reports say that several senior executives for the company, including Chief Private Brand Officer Tim Adams, flew to the country last week, fueling speculation that Macy’s is finally ready to break into the Chinese market.

“I really can’t say much,” an anonymous supplier told Women’s Wear Daily. “They are exploring opportunities to expand. Terry wants to maximize his brands, and bring INC and other brands there. He is definitely smelling out the opportunities and has spoken to a bunch of entrepreneurs there. They are doing some due diligence, exploring how to maximize their brands — that includes bringing the [Macy’s] box and private brands.”

Although some are skeptical that plans for expansion spurred the trip abroad, Lundgren has acknowledged his interest in China in the past. At the 2013 WWD CEO Summit, Lundgren said, “I do believe at some point in time both brands [Macy’s and Bloomingdale’s] will have an international footprint.”

If Macy’s is planning an expansion into China, Lundgren is taking the necessary precautions. Thriving in any international market requires tailoring one’s brand to that market’s specifications, he explained last year in an analysts’ meeting.

“When there was construction in China, people would say, ‘Would you mind if we put a Macy’s name on this building?’ We would have made big, big mistakes,” Lundgren said. “We want to make sure we do things the right way. If we go, we’d go with a different perspective and more knowledgeable My Macy’s [localizing strategy] approach.”

Localization isn’t the only hurdle that Macy’s would have to overcome to find success overseas. The $28 billion department store chain would also have to worry about China’s limited real estate opportunities. Acquiring the few hundred thousand square feet of space a department store of that magnitude requires may involve a partnership with a pre-existing store in China.


image credit: smcgee

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