Who Will Change The Bad Performance Of Messi'S Department Store?

Recently, Messi's department store announced that its chief executive, TerryLundgren, will step down next year, and is the leader of the group, JeffGennette.

At the age of 55, he started his career in Macy 'sInc. Messi department in 1983 and became president of the group since 2014. In the past 5 years, he was the group's chief sales officer. He has been promising to take over as a CEO in recent years.

The appointment of his board of directors has come into force immediately, while the 65 year old TerryLundgren will remain in office.

Executive chairman.

People familiar with the matter say that JeffGennette will immediately add responsibilities for managing store operations and make radical changes before taking office next year.

In the face of a series of severe problems such as Amazon.comInc. (NASDAQ:AMZN), TJXCosInc., and NYSE:TJX, such as the strong competition of the discount department stores, the change of consumption patterns and trends, the weakening of the overall demand for clothing and the series of severe problems resulting from the discount sales promotion of domestic department stores and the weakening of profitability, Macy 'sInc. Messi department store is in urgent need of such changes.

According to the data, in the first quarter of April 30th, the group's revenue fell 7.4% to 5 billion 771 million US dollars, far less than the $5 billion 940 million expected by the market.

Sales decline was mainly affected by the closure of 41 stores, and the same store sales overall fell 5.6% in the same period, not only has dropped 5 quarters, but also the biggest decline since the recession in 2009.

Although adjusted for the period EPS0.40 US dollars is better than the market expectations of $0.38, but because of the sharp decline in tourist consumption, the group substantially reduced annual revenue and earnings expectations.

JeffGennette said that his reform will focus on Macy 's Messi department store, purchase the most popular products, simplify pricing mechanism, increase sales staff and enhance customer experience.

Shops will also expand the area of beauty business. Last year, the acquisition of BluemercuryInc.spa and beauty salon would be useful.

Are these platitudes enough to help the biggest department store in the United States turn around? TerryLundgren has increased its profitability by opening up discounted department stores (Backstage) while laying off shop layoffs.

It's still so bad.

JeffGennette said on Thursday's visit that the most effective strategy is the strategy that can be implemented. "We are not prepared to announce major strategic changes today, but we are studying the measures that need to be taken in the future," he said.

Morningstar analyst BridgetWeishaar believes that the poor performance of Macy 'sInc. Messi's department is not due to weakness in leadership, but new leadership and thinking are inspiring.

However, NeilSaunders, chief executive of research firm Conlumino, pointed out that JeffGennette is a member of the existing team. He is also responsible for the current situation of the group. He believes that Macy 'sInc. Messi store needs innovation and fresh concepts, not the stability brought by JeffGennette.

Cowen&Co. analyst OliverChen pointed out that JeffGennette lacks the supply chain, fashion trends and online retail experience needed by Macy 'sInc. Messi department stores, but he may also be the most suitable person to lead the group.

In the past 52 weeks, the share price of Macy 'sInc. (NYSE:M) has fallen by 52.2%, and its market value is only 10 billion 220 million dollars.

Radical shareholder StarboardValueLP has been urging the group to spin off real estate for more value since last July. Last year, the group has rejected the option of setting up the REIT real estate trust fund, but said it would consider selling some assets of flagship store of New York Manhattan HeraldSquare Pioneer Square, flagship store of San Francisco UnionSquare joint Plaza, Chicago StateStreet flagship store, Minneapolis flagship store and shopping center property.

KarenHoguet, the group's chief financial officer, had expected to conclude some pactions by the end of the year.

Macy 'sInc. Messi department store was pformed by TerryLundgren in 2005 by merging FederatedDepartmentStoresInc. and MayDepartmentStoresCo. and renaming it in 2007.

Over the years, he has consistently denied the fact that the physical department store model is dead, but has been busy cracking.

Fast fashion retailers and even self built retail networks such as CoachInc. (NYSE:COH) Coach and MichaelKorsHoldingsLtd. (NYSE:KORS) have posed many challenges.

In the area of e-commerce, Macy 'sInc. Messi department store has achieved outstanding results. In the fiercely competitive US income group, the group was the sixth largest online retailer in the United States last year with a total revenue of 4 billion US dollars.

TerryLundgren and JeffGennette reveal plans to lease more sales area to professional retailers in the future.

At present, glasses retailer SunglassHut, sporting goods retailer FinishLineInc. (NASDAQ:FINL) and home appliance retailer BestBuyCo.Inc. (NYSE:BBY) can greatly supplement the weakness of the department store and meet the growing demand of consumers for sports fitness and electrical and electronic products.