NEW YORK (AP) – Fashionistas who had to cut out the trips to Bloomie’s during the recession can breathe a sigh of relief.
Macy’s Inc. said Thursday it will open its first Bloomingdale’s bargain-priced outlet stores this summer and fall in a bid to attract the style conscious on a budget.
The department store operator said the move to open four such stores is a response to consumers’ focus on value.
This is Macy’s first foray into the outlet store arena. The stores, dubbed Bloomingdale’s Outlet, will open at outlet malls in New Jersey, Florida and Virginia.
CEO Terry J. Lundgren said in a statement the company had been studying the “off-the-mall outlet business for some time, and the timing now is right given the consumer’s particular focus on value in addition to fashion and quality.”
Higher end department stores such as Bloomingdale’s have been hard hit by consumers cutting back during the recession, while their off-price offshoots – such as Nordstrom’s Rack and Saks Off Fifth – have fared better.
In an effort to improve its financial performance, Macy’s, based in Cincinnati, has been shoring up its results with aggressive cost-cutting, including job cuts, lower capital spending and reduced contributions to employees’ retirement funds.
For the nine months ended Oct. 31, the company reported a loss of $116 million as revenue fell 14 percent to $15.64 billion. It narrowed its loss in third quarter ended Oct. 31, helped by tight inventory controls and a move to localize merchandise at its department stores by region. Sales fell 4 percent to $5.28 billion during the quarter.
“Our view is that this is a new growth opportunity for Macy’s; however, it will likely not be material to earnings in the near term,” said BMO Capital Markets analyst Wayne Hood.
Hood said that if Bloomingdale’s Outlets are as productive as Nordstrom Rack stores – which he estimates take in an average of $11.3 million in sales – then Bloomingdale’s sales will average $7 million to $8 million, since they are smaller.
Nordstrom Rack stores average 38,800 square feet while the Bloomingdale’s Outlet stores will average 25,000.
The Bloomingdale’s Outlet stores will offer a range of apparel and accessories for men, women and children – a mix of Bloomingdale’s regular stores clearance items and items intended to be sold only at the outlet stores.
The outlets will be located at the Dolphin Mall in Miami; Sawgrass Mills in Sunrise, Fla.; Bergen Town Center in Paramus, N.J., and Potomac Mills in Woodbridge, Va.
More outlet locations are expected to open in 2011.
Macy’s shares fell 70 cents, or 4.3 percent, to close at $15.74 in trading Thursday.