Advertisement
Singapore markets closed

  • Straits Times Index

    3,176.51
    -11.15 (-0.35%)
     

  • Nikkei

    37,068.35
    -1,011.35 (-2.66%)
     

  • Hang Seng

    16,224.14
    -161.73 (-0.99%)
     

  • FTSE 100

    7,895.85
    +18.80 (+0.24%)
     

  • Bitcoin USD

    63,742.42
    +72.69 (+0.11%)
     

  • CMC Crypto 200

    1,382.05
    +69.43 (+5.27%)
     

  • S&P 500

    4,970.29
    -40.83 (-0.81%)
     

  • Dow

    37,850.28
    +74.90 (+0.20%)
     

  • Nasdaq

    15,328.96
    -272.54 (-1.75%)
     

  • Gold

    2,407.80
    +9.80 (+0.41%)
     

  • Crude Oil

    82.97
    +0.24 (+0.29%)
     

  • 10-Yr Bond

    4.6100
    -0.0370 (-0.80%)
     

  • FTSE Bursa Malaysia

    1,547.57
    +2.81 (+0.18%)
     

  • Jakarta Composite Index

    7,087.32
    -79.50 (-1.11%)
     

  • PSE Index

    6,443.00
    -80.19 (-1.23%)
     

Macy's has a secret weapon this holiday season

Brian Sozzi
·Executive Editor

Santa has already given Macy’s a big gift this holiday season in the form of a successful off-price store format dubbed Backstage.

Macy’s (M) has quietly opened 121 new Backstage locations this year, including nearly 60 in the third quarter. The company now has the Backstage format inside 166 Macy’s stores, or 25% of its fleet. Macy’s told analysts on a third-quarter earnings call they are “dialing up” the marketing for a brand that takes direct aim at off-price king TJX Companies’ (TJX) TJ Maxx and Marshall’s concepts.

The marketing push for the holidays makes sense as Macy’s is seeing stores with a Backstage on one of the floors notch solid high single-digit, same-store sales gains. By comparison, Macy’s overall delivered a 3.3% same-store sales increase in the third quarter.

Backstage is being opened inside often less productive areas of a vast Macy’s store. The concept features heavily discounted full-price merchandise from other departments within Macy’s and offerings specifically made for the brand.

ADVERTISEMENT

By putting Backstage inside of a Macy’s store not only are executives improving store productivity, but setting the company apart from other department stores like ailing JCPenney (JCP) in the mall. Moreover, off-price stores such as Marshall’s are often found in strip centers, leaving Macy’s Backstage something highly unique to shoppers within the confines of a mall.

Macy’s debuted the Backstage format in late 2015 via six free-standing stores. And more are likely on the way in 2019.

“We eventually hope to have one [a Backstage outlet] in every store,” Macy’s CEO Jeff Gennette told me at a conference earlier this year.

Macy’s is aggressively opening off-price stores called Backstage.
Macy’s is aggressively opening off-price stores called Backstage.

To be fair, it’s unlikely Backstage will pose any near-term threat to TJ Maxx or Marshall’s as both operate more than 2,300 stores in the U.S. But the growing number of Backstage stores could prove to be a legitimate longer term threat if Macy’s can maintain the brand’s momentum and explore opening free-standing stores (as it did in the brand’s early days in 2015).

Sleep with one eye open this holiday season, TJ Maxx.

Views from Instagram

Since most have never seen a Backstage, we hopped onto Instagram to see what people are saying. The common thread that ties the numerous posts together is shoppers being surprised by the prices and selection.

View this post on Instagram

So many cheap candles at Macy’s Backstage 😯 (its a section of Macy’s that has deeply discounted items but only in select stores. Check their website for a store near you). . . . . #macysbackstage #couponcommunity

A post shared by Lauren 💕💕 (@laurenlovesdeals) on Sep 29, 2018 at 4:36am PDT

View this post on Instagram

Today, I had the chance to check out @macysbackstage in a press preview in my @citychicusa dress! Let me tell you I snagged the cutest bag and rose gold @dkny sneakers- both under 100! If you’re looking for off price home decor, girl… you’ll need to check them out! They do have plus size and I’m waiting to see what their next deliveries look like, but I’m here for this! 📸 by @societyofharlow #macysbackstage

A post shared by The Curvy Fashionista (@mariedenee) on Sep 13, 2018 at 3:10pm PDT

View this post on Instagram

New store under Macy’s umbrella ☂ #macysbackstage #macys

A post shared by مغربية في امريكا (@moroccan_in_usa) on Nov 6, 2018 at 3:12pm PST

__

Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi

Read Yahoo Finance’s Exclusives:

Procter & Gamble CEO: We aren’t splitting up the company

Coca-Cola CEO: Why we aren’t getting into the alcohol business

Hershey CEO: We are having a game-changing year

Panera Bread CEO: Here’s how you will order your food in the future

PepsiCo CFO: There are no plans to break up the company

Former Cisco CEO John Chambers on tech’s biggest problem

Burger King’s CEO shrugs off Wall Street’s worries

Roku Founder: The golden age of TV is just beginning

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.