March 28, 2022
Continuing its rapid deployment, Macy’s announcement plans to expand Backstage in-store shops to 37 more complete line locations this spring, bringing the off-price concept to nearly 60% of the chain and reaching its flagships Herald Square and State Street.
The 37 stores, ranging from 11,000 to 16,000 square feet, add to the 45 in-store stores added in 2021. The concept will reach approximately 300 of Macy’s 510 locations.
“Macy’s Backstage inspires customers to express their personal style through its value-priced, quality product and brand offerings, which is why we look forward to bringing Macy’s Backstage to more of our local communities,” said Michael. Hersh, vice president of Macy’s off-price, in a statement. “We are especially excited to bring Backstage to our downtown Chicago and New York stores as the brand expands nationally.”
The retail company, which also owns Bloomingdale’s and Buemercury, operates six standalone Backstage locations.
Backstage was launched in 2015 as a standalone concept as Macy’s sought to capitalize on the strong growth seen in the off-price channel. In 2016, Macy’s focused on in-store stores in hopes the concept would drive increase purchase frequency and attract new customers. Despite investor concerns about cannibalization, Macy’s in early 2019 reported that adding Backstage to an existing store averaged a sales boost of more than five percentage points.
Macy’s full-line stores and Backstage has completely separate buying teams.
Asked at the beginning of March for a point on Backstage during a investor conference, Macy’s CFO Adrian Mitchell said, “It’s an important dimension for us to operate on all three levels of value – the luxury level, the off-price level, and everything in between – so it was very well received. It continues to have a very healthy growth profile, but it certainly taps into a younger, more diverse customer base that’s a bit more value driven than our full-line box, so we’re excited about the opportunities there.
DISCUSSION QUESTIONS: Has the Backstage concept proven in Macy’s full line locations? Does Backstage’s rollout in Macy’s stores mean the concept won’t take off as a standalone concept?
“Macy’s hit the nail on the head with Backstage and the rollout is a smart strategy to capitalize on off-price success.”