My Macy's Becomes a Standard of Success

(MoneyWatch)  Even as it continues to consolidate its corporate structure, Macy's is investing money and hope for improving results in the year's second half into My Macy's, an initiative to localize the product mix in its stores.

In its year-end conference call yesterday, Karen Hoguet, the company's CFO, said Macy's wants to spread chain wide the 1.5-point improvement on comparable store sales ?€" defined as sales in stores open for at least a year -- that stores in 20 pilot My Macy's regions generated in last year's fourth quarter.

To get the fourth quarter improvement, the My Macy's stores had to withstand a decline of five points in the first half of the year versus standard stores while they instituted new procedures and realigned merchandise. Hoguet made the point that the company's recently announced decision to consolidate four corporate divisions into two major offices and to close stores wasn't only an adjustment to lower sales levels in the recession. The company also wanted to free up cash to expand the My Macy's initiative from the pilot regions to the rest of the United States.

In providing guidance for the year, Hoguet said that Macy's expects stronger sales in the back half of the year, and this isn't just optimism about economic recovery. The company also believes stores operating in My Macy's mode will be enjoying significant sales gains by then and into the holiday season.

The My Macy's initiative organizes the company's product planning and display function into a total of 69 geographic districts each consisting of 10 to 12 stores, all supported by eight regional offices. In the meantime, Macy's is consolidating corporate functions into a New York office, responsible for buying, merchandise planning, stores senior management and marketing, and its Cincinnati headquarters, responsible for finance, human resources, law, property development and purchasing. It's closing divisional offices in Miami, Atlanta and San Francisco.

So, the company is pegging its hopes for 2009 on its My Macy's initiative and setting up fourth quarter results as the standard against which its optimism will be judged.