Last Updated Aug 26, 2010 2:39 PM EDT
Expanding its relationship with the musician/designer, Macy's will become the exclusive U.S. department store purveyor of Combs' Sean John men's sportswear collection beginning in next spring online and at 400 stores in markets from San Francisco to New York where it has the best prospects. Sean John is the latest and most conspicuous move Macy's has made into contemporary/urban styles, following up on initiatives launched with the musician Usher and former Rocawear and independent designer Rachel Roy.
National retailers who call their shots from the mass-market playbook developed by Kmart, Target (TGT) and their rivals launch high-profile brands developed to entice specific demographics as supplements to broadly popular labels. It isn't just an ethnic strategy; instead, it aims beyond at other people who are influenced by a particular style.
Sean John is a great candidate, as it traces its origins to the hip-hop world but also incorporates elements from more established traditions. In its statement on the introduction, Macy's said that the brand will take "a modern approach to rejuvenating classic silhouettes" in its stores.
Terry Lundgren, Macy's CEO, was partnered with Combs in events surrounding the Sean John announcement, demonstrating his support for the brand and the strategy behind it. But also Lundgren is the guarantor of Macy's local strategy, which involves field staffers who are supposed to monitor and represent regional tastes to Macy's New York buyers. He set his seal of approval -- and lent his authority -- when it went from test to chain wide last year.
So, can Macy's emphasize both local and regional operations with the same strategic framework? Possibly, given strong commitment at the top, at least for a while. The thing is, the top tends to become preoccupied with whatever is raking in the dollars, and Lundgren already has provided evidence that his commitment to big deals is at least as strong as it is to local fiddling.
When Macy's decided to chunk its chain into 10 to 12 store "regions" and put folks in each as representatives of local preferences, it didn't provide them with purchasing authority. So, the New York buyers have the real power in the arrangement, which only can be tempered by the will of senior management to insist that local voices be heard. And, as the Diddy deal suggests, senior management has hardly abandoned its mass-market strategy.
The local initiative may win back some customers who were angry with Macy's for homogenizing their local department stores by replacing their unique names and products with its own. Once it's brought back as many shoppers to the fold as it can, though, what then? Local is a reclamation strategy, not a growth strategy. After all, the acquired department stores were snatched up over the past decade because they couldn't keep pace with retail trends that clearly favored rapidly and nationally expanding mass-market chains.
Once consolidation occurs, advantage of size and scope are the ones managers rely on to drive sales. So, it seems, the future is Diddy's, at least as regards long-term growth in the Macy's scheme of things.