Last year, Macy’s dipped its toes into the waters of discount retailing by opening six off-price offshoots called Backstage, and announced the closure of 40 struggling locations of its namesake store. Now it appears the retail company plans to meld those two things by opening 15 Backstage stores inside exiting locations, and opening one standalone discount location.
Macy’s CEO Terry Lundgren announced the larger foray into discount retail during a conference call on Monday, noting that the store-within-a-store concept would be piloted throughout the spring months.
Under Macy’s plan, the company will open a total of 16 Backstage locations — 15 inside existing Macy’s and one free-standing location.
The upcoming tests aim to determine whether the discount stores will take away business from traditional stores, Business Insider reports.
Backstage will feature the same variety of goods you’d see at Macy’s — everything from clothing to housewares to jewelry — but at discounts of 20-80%.
Some items will be clearance sales from the regular Macy’s lineup. Others will be products purchased specifically for the Backstage stores.
Retail analysts tell Business Insider that while offering discount stores could help turn around Macy’s slumping sales, it could also lead customers to become accustomed to paying less, in turn, refusing to shell out more money at traditional, full-price locations.
“Over time as their discount stores outnumber their full-price stores; consumers will perceive the flagship brand and the discount store brand to be one and the same,” Robin Lewis, retail expert who writes the blog, The Robin Report, tells Business Insider. “Sadly, they will happily continue to shop in the brand’s discount store where they can get it cheaper.”
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