U.S. Macy profits from struggling J.C. Penney

U.S. Macy profits from struggling J.C. Penney

Three years ago Macy’s department stores began tailoring merchandise to local tastes in a move to resonate more strongly with customers in different regions

The company has also a stable relationship with exclusive brands by the likes of Rachel Roy, Donald Trump and Martha Stewart. Macy’s business profited also of struggling J.C. Penney (see TextileFutures news of today) and is raising its full year earnings guidance from USD. 3.30 to USD 3.35 a share. In the second quarter of 2012 its fiscal earnings surged 16 % to USD 279 million (USD 241 million) and in line with revenues and particularly online sales. The gross margin was slightly up from 41.8 to 41.9 %.

Same store sales were more than expected on the rise (3 %) in July but less than expected in June since the company faced lower spending from tourists. In addition the renovation of its Herald Square store in New York City (USA) created more short-term business disruption than anticipated. The company will take a break in the multiyear Herald Square remodelling project in the fourth quarter in order that customer shopping patterns are uninterrupted during the holiday season. The retailer expects all of its first- and second-floor selling space at Herald Square to be fully reopened over the next 90 days, including the women’s shoe department which opens partially in the ongoing month and will continue in stages in the months ahead.

Sales growth was aided by a 36 % increase in e-business. In May, Macy’s made its first investment abroad on behalf of its namesake stores by acquiring for USD 15 million a stake in a Chinese online retailer (VIP Store Co.) who will sell Macy’s merchandise on its website, and now Macy’s holds a minority stake. Macy will sell its merchandise to Chinese consumers through a dedicated section on the mentioned website.

www.macys.com

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