Will Macy’s, Nordstrom merchandise overhauls lure shoppers?
Quarterly results from Macy’sNordstrom
In an effort to boost sales, Macy’s – which reports second-quarter results on Tuesday – has focused on revamping its private brands, including its new On 34th label launched in July.
Nordstrom, which reports results on Thursday, hopes to turn around its struggling off-price Rack
Analysts expect Macy’s to post a 87% slide in second-quarter profit, dragged down by heavy discounting to clear spring and early summer merchandise, according to Refinitiv.
Nordstrom’s second-quarter revenue is expected to fall 11% while analysts anticipate a nearly 45% fall in profit.
Retailers from Target to Coach
In mid-July, it asked more than 7,800 men and women where they most often shopped for women’s clothing. Thirteen percent answered Walmart and 9% answered Amazon, compared to 5.8% for Macy’s and 3.3% for Nordstrom.
Consulting firm Deloitte
Results for the quarter ended July 30 can provide only a partial snapshot of the back-to-school shopping season. Still, the retailers’ executives may provide Wall Street with new clues on what styles, if any, are selling well ahead of the new school year.
Macy’s new private-label brand, On 34th, is aimed at women aged 30 to 50 and includes low-priced staples such as a soft-knit button-down top priced at $39.50, as well as trendier apparel like a $79.50 tulle midi-skirt and a $275 suede leather jacket.
At a launch event last month, Macy’s top executives said the brand was designed for “seasonless” dressing, with knits and fabrics – including items such as fine-gauge sweaters – meant for layering.
Macy’s owns more than 20 private label brands, which are developed by the retailer and produced by its own suppliers rather than purchased wholesale from other apparel makers.
Kathy Gersch, a retail industry consultant at Kotter International, said stores’ own private labels are more profitable than buying inventory wholesale from third-party garment makers. Yet the higher profit margins can be offset by heavier investments by stores in product development and marketing.
“They have to try to make them more compelling than other mass market clothing in order to make it a real draw, so people actually come in for those brands,” she said.