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Can Macy’s Survive a Rebranding?
Leadership & Org Behavior
Keller University
Dr. Jacqueline Lang
February 5, 2016

TABLE OF CONTENTS
Title Page………………………………………………………………………………….... Page 1
Introduction…………………………………………………………………………………. Page 3
Problem Statement…………………………………………………………………………... Pages 3-5
Literature Review……………………………………………………………………………. Pages 5-7
Analysis………………………………………………………………………………………. Page 8
Solutions………………………………………………………………………………………Page
Reflections ……………………………………………………………………………………Page
References …………………………………………………………………………………….Page

Is this the End of Macy’s?
Introduction
I will be researching and reviewing the department store Macy’s. They have been in the news a lot lately, reporting over 40 store closings and being down 5% in the marketplace. Macy’s has attributed their decline in sales to greater online competition arising, like Amazon and EBay. They’ve stated that there has been a large shift to online operations and away from the traditional mall locations. (Isidore, 2015) This past winter Macy’s sales were down 5.2% with the quarter being its third declining sales quarter. Other problems are said to be a shift away from spending on apparel and housing goods, a drop in international tourism, increasing competition, and a lethargic economy. Can a once department store powerhouse recover, and keep up with the ever-changing technological age or will they become the shadows of online retailers like Amazon? Macy’s plan to come out of the slump is expand outside of the United States, advance its e-commerce system, expand its Bluemercury retail chain (similar to Sephora stores), and raise currency from its real estate. (Wahba, 2015). My research will be devoted to analyzing Macy’s proposals for change and evaluating if they have implemented the proper plans. I will also be coming up with my own solutions using Terminal Course Objectives A (Given an example of a dysfunctional organization that is highly diverse, evaluate how organizational theories and practices can improve the situation) and C (Given an ineffective individual or team in an organization, evaluate how motivation affects organizational behavior and the achievement of organizational goals).
Problem Statement Can scaling back resources scale up revenue? Recently Macy’s has blamed much of their revenue loss on the warmer winter months we’ve encountered; however, that doesn’t quite explain everything since J.C. Penney’s faced the same conditions and were up 3.9 percent last quarter, in comparison to Macy’s who was down 4.7 percent. Even though it’s clear that we’ve faced warmer weather this year, “analysts agree that Macy's issues extend well beyond balmy conditions.” (Gustafson, 2016). Unfortunately for Macy’s, they’re a classic department store and they’re losing their zest with modern day youth. It just doesn’t appeal to today’s crowd like it once did back when it first opened its doors. To counter these facts Macy’s has released a statement on their plan for the upcoming year.
Going forward, Macy’s and Bloomingdale’s will be better able to move more quickly and nimbly to select merchandise, assort inventories, and serve total customer demand, no matter how, when or where the customer shops. Some redundant activity also can be avoided to accelerate speed to market, partner more effectively with vendor resources and ensure the merchandising organizations are more responsive to the marketplace in making and implementing decisions. (Asch, 2015).
As I’ve gathered from reading, Macy’s’ approached to the problem is to scale back storefronts and employees and also keep inventory lower than it has been. Although they have closed over 40 stores, they’ve also spoken on their plan to open more stores. One of which will be in California and employee 1500 permanent employees and 1000 seasonal workers. There will be some recreation of job opportunities, but some divisions of the company will be completely diminished, like the district planner positions. They will also be adding an IT department to add focus to the lacking e-commerce presence. Can cutting back on conventional resources launch this classic company into a successful future? The company has suffered a three-quarter sales fall, but they are optimistic of their new endeavors.
Literature Review California Apparel News is a weekly apparel/clothing industry news gateway presenting the insiders' perspective of the fashion world and business with viewpoints on manufacturers, designers, consumers, retailers, etc. CAN, as it is abbreviated, has been the leader in covering Los Angeles Fashion Week and sponsoring events like the Mercedes-Benz Fashion Week at Smashbox Studios. CAN also reaches a select world of influencers and decision-makers in the apparel industries weekly. The newspaper is reviewed by the Circulation Verification Council and is distributed at over 100 trade shows every year. This website provided me with an inside view and analysis of the organizational changes Macy’s made early in 2015, the beginning of the year where they suffered three consecutive failing quarters. Most of the other sites only gave me one reason why Macy’s was failing (the reason Macy’s gave), but the site gave a deeper answer. Macy’s was not staying up-to-date with technology and they (their apparel) no longer appeals to the crowd doing most of the shopping. This along with the warmer winter months have all contributed to the steady decline. CNBC is a United States cable, satellite and internet business news television station and channel, held by NBCUniversal News Group. They provide all of the most recent news on earnings, financial issues, and stock markets. This site was able to give me a second opinion, back up, for the assertion that the company had more to blame than just warmer winter weather; reason being, they had already had two consecutive declining quarters and that other department stores suffered the same circumstances, but managed to come out on top. This proves that the decline was due to more internal issues than external. CNN Money is the world's biggest business website. CNNMoney is CNN's select business site offering insight on markets, business, media, technology, luxury, and personal finance. From this website I learned that Macy’s has been suffering from the shift from in-store shopping to online shopping and the grueling competition from online stores like Amazon and EBay. Isidore also did well explaining that the company’s technological attempts hadn’t been as advanced as they should have at this point. This site grouped with my two previous listing gave me the awareness I needed that there was a lot more to blame than just warmer winters, getting me to delve much deeper into my research in an attempt to offer a real and accurate analysis and solution. Zack’s is the primary investment research firm focusing on stock research. For more than a twenty-five years, it has approximately tripled the S&P 500 with a regular gain of +26% every year. Zack’s provides a price response indicator, Most Accurate Estimate, Expected Surprise Prediction, and Equity Research; to name a few of their services. Although I originally went to see how Macy’s was doing in comparison to J C Penney’s, I learned how they were holding up against other companies like Zumies and The Gap, who also reported having declining December sales. It let me know that even though the weather wasn’t the only factor it was still a respectable factor that needed to be taken into consideration when considering Macy’s full organizational analysis. On the other hand, the site also introduced me to many other ventures Macy’s will be making in an attempt to rebrand and recover any loss in sales or audience. Analyst have pointed out that customers like to discount in areas like apparel and cosmetics (extreme couponing and bargaining) and spend more heavily on electronics, cars, and home goods. Therefore, Macy’s will be focusing more efforts and electronics, home goods, and online shopping in upcoming months. KTLA is a CW-affiliated television station in Los Angeles, CA. The station is owned by the Tribune Broadcasting subsidiary of Tribune Media. The company offers news, history, FAQ, and programming information. This site provided me with an understanding of how many stores would be closing, how many employees would be lost, where new stores would be opened, what job positions would be diminished, and also where employees would be hired on. I appreciated this information because like other articles I pulled it wasn’t focused on what caused the fall, but focused more on the effects and thereafter. People are losing their jobs and careers over this. This is a huge situation for many and it needs to be handled as such. Lastly, Fortune is an American business magazine, published globally by Time Inc. They compete with both Forbes and Bloomberg Businessweek in the national business magazine category. It is, essentially, best known for the Fortune 500, a ranking of top companies by revenue that has been published every year since 1955. Fortune gave me information about how Macy’s planned to recover from these decreasing sales and loss of revenue. I was initially surprised to learned that with the closing of so many stores Macy’s still intended to open more. However, this site educated me that Macy’s main focus is to close stores with the lowest sales and reopen stores in places with more foot traffic. They also plan to beef up the merchandise, so to speak, to gain a larger in-store crowd. They will be adding more brands and also a company similar to Sephora to be offered inside the stores’ space.

Prelim Analysis The problems Macy’s were facing are had to do with inventory, merchandising, and lack of online presence. To go a little more in depth, they were not adequately prepared for a possible shift in weather, they hadn’t updated their merchandise to appeal to a larger audience and they didn’t develop an adequate e-commerce or online sales system.
Prelim Solutions * Hire on an IT department to handle the e-commerce, online sales, and develop social media channels to assist in growing their audience * Hire/develop/train a merchandising and marketing team to coordinate projects events that create awareness for the changes that are happening * Pay more attention to forecasts and weather conditions, etc. to help control inventory so that there isn’t a large overabundance of apparel after any season

REFERENCES
*Asch, A. (2015, January 8). Macy's Inc. Announces New Stores and Organizational Changes. Retrieved February 04, 2016, from <https://www.apparelnews.net/news/2015/jan/08/macys-inc-announces-new-stores-and-organizational-/ >.
*Gustafson, K. (2016, January 7). Macy's excuse doesn’t explain everything. Retrieved February 04, 2016, from < http://www.cnbc.com/2016/01/07/macys-excuse-doesnt-explain-everything.html/>.
*Isidore, C. (2015, September 9). Macy's closing up to 40 more stores. Retrieved January 20, 2016, from <http://money.cnn.com/2015/09/09/news/companies/macys-store-closings/>.
JC Penney's Holiday Sales Rise but Macy's Lag: Why? (2016, January 11). Retrieved January 20, 2016, from <http://www.zacks.com/stock/news/203399/jc-penneys-holiday-sales-rise-but-macys-lag-why>.
*Ryan, K. (2016, January 6). Macy's to Lay off 4,300 Employees and Close Stores, Including 2 in California. Retrieved February 04, 2016, from <http://ktla.com/2016/01/06/macys-to-lay-off-4300-employees-after-poor-holiday-sales/.>
*Wahba, P. (2015, August 12). Here’s Macy’s plan to revive its slumping sales, profits. Retrieved January 20, 2016, from <http://fortune.com/2015/08/12/macys-sales-decline/>.

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