We went to Macy’s and saw why the brand is a disaster

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Mallory Schlossberg/Business Insider

Macy’s has been falling apart.

The once beloved department store has reported five straight quarters of plummeting sales. Sales most recently dipped 7.4%.

In the past, Macy’s – and others – have blamed myriad reasons for the department store’s woes.

The weather was too warm for fall and winter apparel.

People aren’t spending money on clothes anymore.

Amazon is eating into the market share of the apparel industry.

We went to Macy’s to find out why the brand is floundering. What we found shocked us.


Here we are at Macy’s in Herald Square in Manhattan.

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Herald Square is a hotbed of sweat, germs, filth, and tourists. It’s like an ominous preview of what’s to come …


When you first walk into Macy’s, everything luxurious (or accessibly luxurious) is on display.

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From Coach bags to Kate Spade to Louis Vuitton to high-end makeup, it’s an affluent shopper’s dream.

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Walk up one flight to the lower-tier handbags and the facade starts to erode.

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It’s a mess.

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Macy’s advertises its credit card everywhere. You can save 20% when you open a credit card! But you can also save money by buying all of the on sale merchandise.

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After all, lots of bags are on sale. Sales, of course, are fun for consumers, but they’re also indicative of the fact that a company is struggling to clear inventory.

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The clutter is also evident of Macy’s inventory problem … and simply a lack of attention and care.

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Almost every category has huge sections on sale and clearance.

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This is one of multiple clearance rooms filled with unwanted shoes. No one wants them.

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Making it even harder for those clearance shoes is the fact that name-brand shoes are on sale, too.

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Since everything’s on sale, you have no reason to pay full price.

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This is a problem that has run rampant at traditional retailers like J. Crew and Banana Republic. Consumers need a reason to pay full price, and when sales and promotions permeate the stores, it’s difficult to get them to fork over the big dollars.


All that aside, Macy’s does sell some very nice apparel brands, like Michael Kors.

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Too bad most of it is on sale, both eradicating the company’s prestige and, again, giving consumers little to no reason to pay full price.

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There’s even a mini Last Act clearance section in one of the Michael Kors sections.

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Apparel is hung precariously throughout the store.

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Maybe a consumer was considering buying a nice garment, but the fact that it all feels like a TJ Maxx is a huge turn off.

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There’s nothing wrong with TJ Maxx (in fact, sales are blowing up there!), but you don’t go to Macy’s for that experience. You go to TJ Maxx for the off-price experience.


It’s like that all throughout the store.

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It’s a bit of a cyclic effect. The mess makes the store more of a turnoff to shoppers, and the lack of shoppers only makes it worse.

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There are, however, bright spots in the store — like a spotless, pristine Nike section.

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You wouldn’t want to insult the biggest apparel retailer in the US, right?

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Source: Business Insider


The Lucky Brand section didn’t look terrible, either.

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Free People is aesthetically appealing, too.

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And the home goods and bedding sections didn’t look like messes.

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The problem, of course, is that these bright spots are paltry compared to the rest of the store, like this semi-haphazard section of gowns …

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… and this abandoned Michael Kors department.

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At least someone was sweeping up the athleisure section.

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Lots of coats are on sale, which can be expected in May.

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CFO Karen Hoguet specifically pointed to warm weather as one of the reasons for Macy’s struggles at the end of the third quarter in fiscal 2015.

“The weather has not helped with the warm temperatures experienced across the country,” she said. “Our sales of cold weather merchandise, such as coats, sweaters, boots, et cetera, were significantly below last year in the quarter.”

But thanks to climate change, unseasonable weather is the new normal. How will retailers adapt?


Macy’s sells some high-end lingerie, like L’Agent Provocateur. But it’s hard to want to shell out lots of money on lingerie when …

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… you might have also waded through the Last Act section on your way there.

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Macy’s has been installing off-price Last Act sections into its stores, and it has been contributing to the steady erosion of its reputation.

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Macy’s is putting full-on off-price Backstage stores in stores, too.

CEO Terry Lundgren seems to think this is a good idea. “We have to make stores more productive – all of us box stores,” Lundgren told CNBC in January. “Customers buying online have got to find more reasons to visit.”


You only have to look to see how that might happen.

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“The attempt to shift perceptions are hampered by Macy’s muddying the water by including the Backstage discount concept in mainstream stores,” Neil Saunders, CEO on retail-consulting firm Conlumino, wrote in a note to clients.


Macy’s is ultimately just not giving shoppers a reason to go to its stores anymore.

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“The blunt truth is that Macy’s does not give consumers a reason to visit its stores,” Saunders wrote in a note after Macy’s earnings announcement in mid-May.

And it’s true. No matter how upscale some of the brands that Macy’s sells may be, it all seems for naught, since going to Macy’s is simply an unpleasant experience. Separating sections by floor can’t clear a shopper’s mental space; it’s hard to compartmentalize the luxury from the messy bargain bins.

That’s not to say there’s anything wrong with shopping at off-price stores, from a consumer perspective – but Macy’s seems to be paying no mind that it is helping to contribute to its own deterioration.

Shopping at Macy’s was once seen as an experience, and now it seems like a chore – get in, get your clothes, and get out. Or don’t bother going in at all. After all, why bother when there are so many other ways to shop these days?