Macy’s partnership with Toys ‘R’ Us is a part of a merchandise technique that has labored for Goal
Macy’s Inc. has partnered with WHP Global to add Toys ‘R’ Us items to its toy line, one of many product categories that the department store retailer is looking to reinforce to reach a wide range of customers.
The partnership has already brought more toys to the Macy’s website. It will expand to 400 Macy’s stores next year.
“Our toy business has grown exponentially over the past year,” said Nata Dvir, Macy’s chief merchandising officer, in a statement accompanying the announcement of the partnership.
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“Toys ‘R’ Us is a globally recognized leader in children’s toys and our partnership allows Macy’s to significantly expand our presence in this category while creating more opportunities for customers to shop with us across their lifestyles.”
Department store retailers struggled before COVID-19, and store closures and closings presented new challenges during the pandemic.
As vaccinations roll out, restrictions ease and shoppers go back to school, Macy’s says the store has benefited from customers looking for clothes, fragrances, and jewelry.
But Macy’s M, + 19.59% Chief Executive Jeff Gennette says the company has a strategy that goes beyond adding toys and selling party clothes.
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“By offering a wide range of categories, products and brands from cheap prices to luxury, we are able to meet the needs and desires of a wide variety of customers and be flexible,” said Gennette, according to a FactSet transcript the company’s second quarter results, also announced Thursday.
“As a department store, we were able to analyze data with our wide range of products in order to promote cross-category shopping within our ecosystem. Think about exposing our significant fragrance customer base to all the novelties we have in denim or connecting with this millennial mom when she’s looking for back to school clothes. ”
Macy’s profits and sales exceeded expectations. The company also reinstated its dividend, making it one of the best returns among retailers, and announced a new buyback program.
All the news sent stocks up 18.4% in Thursday’s trading.
Aside from being the heart of a department store, offering a variety of goods in a variety of categories is a strategy that Target Corp. had worked. TGT, -0.88%
“Target’s performance in the second quarter also demonstrates the strength and consistency of our business model,” said Christina Hennington, Target’s chief growth officer, during the company’s conference call, according to FactSet.
“Our unique multi-category range offers the right balance between the wishes and needs of our guests, even if they sometimes change quickly. As a result, despite the record growth last year, all five of our most important merchandising categories have grown again this year and prove that there is still a lot of runway ahead of us. “
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In addition to competition from Target, other department store retailers, and many other retailers, Macy’s could also compete with Amazon.com Inc. AMZN, -0.42%,
that plans to expand its retail arsenal to include stationary locations similar to department stores.
And: Amazon plans to open large retail locations like department stores
“It is clear to me that a comprehensive retail ecosystem with physical stores in the best malls and the most productive off-mall locations integrated with a world-class e-commerce offering is a strong combination and brings us forward as a company , digital omnichannel business, ”said Macy’s Gennette when he called.
Macy’s stock is up 90% year to date. The SPDR S&P Retail ETF XRT, + 0.23% gained almost 44%. And the benchmark index S&P 500 SPX, + 0.13%, is up 17.4% over the reporting period.