Macy's CEO Tony Spring Talks Big Earnings Beat, Macy's Brand Evolution

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Romaine Bostick** (0:07)
I'm pleased to say that the CEO of Macy's Inc joins us right now, Tony Spring, here in Studio Two. Tony, great to see you here.

**Tony Spring** (0:13)
Great to see you.

**Romaine Bostick** (0:14)
3% comp sales growth, Bloomingdale's, your old job, which used to run there, phenomenal 10% comp sales growth. And the turnaround that you've been trying to execute for the Macy's brand seems to be really taking hold.
1.6%, 1.5% growth there. And I think if you just take the stores that you've remodeled, you're over 2%. Correct. This is now what, four straight quarters of this?

**Tony Spring** (0:38)
This is four straight quarters of growth, five quarters of beating our guidance, 10.2% growth you mentioned at Bloomingdale's, 2.4% growth at the reimagined stores. We feel like we are on the curve of beginning to transform the Macy's Inc portfolio company.

**Romaine Bostick** (0:55)
The conversation was a bit different, even a year ago. People were writing your obituary, the Macy's obituary. They were writing the department store obituary. Is this turnaround just about a better experience in the stores, or is it about something different that we're not really picking up on?

**Tony Spring** (1:10)
Well, I never bought into the extinction of department stores. I think it's bad stores don't have a place in the retail ecosystem. Sometimes they can survive longer than they should.
Great stores people love. People love Harrods, they love Selfridges, they love their department stores. We're a department store, we do a really good job. When we do, we get credit from the consumer. When we don't, we don't get credit from the consumer. So I really just took it internally and challenged our team to say, let's satisfy the customer, let's put people back in the stores, let's update the product mix, let's do a little storytelling on the visuals. How about some help in the fitting room where the customer is craving support once she's taken her clothes off and is looking to figure out what size is going to work for her.

**Romaine Bostick** (1:51)
So customers seem to be a little bit more excited about what's going on. I am curious about the brands, the vendors, the things you sell there. Are they also excited? I mean, are you seeing more interests from brands that maybe had left the Macy's ecosystem in the past and maybe are knocking back on your door?

**Tony Spring** (2:08)
Yeah, we've talked about new brands coming in, Donna Karen, Donna Karen Weekend, Rothie is new to both Macy's and Bloomingdale's, the addition of Ted Baker and Theory and Reese. Bloomingdale's certainly big luxury expansion. So I think the brands we're looking to see, are you ready to take care of the business? Will you be accretive to my brand positioning? Will you help me to reach customers I can't reach without your support? And I think the team has done a good job of explaining that. Macy's 38 million active customers. That is not easy to buy in the media market. So how do we make sure that we're presenting our brand in the right way so that we're capturing new customers, that maybe we're the first time that they're learning about our brand and that we're proud of the level of business we do?

**Romaine Bostick** (2:50)
I am curious, one of the big criticisms of your bold new chapter, your turn-up around plan is that you're basically shrinking.
The idea that you're leaning too heavily on Bloomingdale's, which is obviously a success story.
And there are a lot of people that want to know sort of, is this sort of a big structural shift for you with regards to what Macy's Inc overall is going to be? Is it going to be weighted more towards luxury and Bloomingdale's? Or is it going to be the complete sort of ecosystem, Macy's, Bloomingdale's and Blue Mercury?

**Tony Spring** (3:22)
What was the three-part strategy from the very beginning? The first chapter of a bold new chapter was strengthen and reimagine Macy's. And while we had to close some stores, we still have a few more stores to close, the primary focus was reimagining stores. I think when you and I talked the last time, I said a strategy is not a strategy, but it's just about closing underproductive stores or monetizing assets. The strategy is making it better for the consumers. So we put more people in the stores, we added more inventory, we brought in new brands, we made the website more inspirational. But the second part of the chapter is to grow Bloomingdale's, because why wouldn't we? We own Bloomingdale's. It's a great brand and has so much potential, organic potential, physical potential, digital potential. And then the third piece of the strategy was to make sure that we were operating efficiently and effectively and serving the customer. So I'm proud of the fact that the supply chain team we're in stock better, we're flowing inventory to the customer faster, we're having less issues with the consumer. That's why our net promoter scores, how we measure customer service are going up.