Give Macy’s Credit for Its Private Label Business

What’s with everyone making a big deal about Macy’s hiring a new executive out of Target to head up its private label business?

Sure, Target is world class in developing store brands – probably the best in the business right now – but everyone seems to be forgetting that Macy’s is no slouch when it comes to this either.

In fact, in the Private Label Hall of Fame (and if there isn’t such a thing, somebody ought to start one), I’d put Macy’s right up there with some of the other great stalwarts of this hallowed retail tradition, including 20th century Sears, Gap in its prime, Kmart back in the Joe Antonini days, the lovely Ann Page-era at A&P and, of course, Target of the past few decades.

Going back to its much earlier days as a single store on Herald Square and a few branches in the New York metropolitan area, Macy’s has consistently and quite competently featured its own house brands that have been foundations of its merchandising mix from apparel to consumer electronics to home furnishings.

Who doesn’t remember – if you’re of a certain age  — the Supremacy brand, which had to be one of the cleverest word plays in all of retailing history? Often spelled out “Supre-Macy” – get it now? – it was a staple of the store’s earlier TVs, radios and other tech gear back before the Japanese, Koreans and Chinese took over this business and Macy’s pretty much got out of it.

But even if it went to that great bargain bin in the sky, Macy’s has continued its private label tradition all throughout the store. In apparel, such powerhouse brands as INC, Alfani, Charter Club, Club Room and the new And Now This have been cornerstones of both its women’s and men’s businesses, kids too. On the home side, Charter Club and INC are staples but perhaps its biggest success has been its Hotel label, which gets maybe the largest piece of real estate in the home textiles department.

One press report on the announcement this week that Target exec Emily Erusha-Hilleque was headlined “Getting serious about private label, Macy’s hires Target veteran” and I just had to laugh. Sure she was part of a group at Target that did amazing things, a team that previously included Mark Tritton, who left to try to repeat that strategy as CEO of Bed Bath & Beyond. She no doubt was good at her job and she will bring a new outsider’s view and vigor but she’s joining a retailer that has nothing to be ashamed of when it comes to house brands.

Right now they account for somewhere between 15 and 20% of overall sales according to press reports and Macy’s has said as part of its Polaris strategy it wants to bump that up to 25%. It has said several of its existing brands were “well on their way” to reaching the $1 billion mark in annual sales, a benchmark Target has used to identify its best properties. Let’s remember, however, that Target has close to 2,000 stores and does more than $100 billion overall while Macy’s revenue is less than a tenth of that, at under $9 billion, with just over 500 stores. So, that ain’t bad and its private labels are not exactly “tired brands” as that report suggested.

Macy’s has its challenges, to be sure, but let’s not call them a slacker when it comes to private label house brands. That would be Supremely wrong.

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