Macy’s Goes Outdoors, Optimizing Bed Bath & Beyond, and the Return of the Movies

Placer ,  September 16, 2020

In this Placer Bytes, we talk about Macy’s move outdoors, Bed Bath & Beyond’s optimization efforts, and the return of the movies.

Macy’s Goes Outdoors

Macy’s is going to test a new format, shifting away from the traditional indoor mall and focusing more on outdoor centers. And while this is a concept many have been discussing, it only takes a quick comparison to department rival Kohl’s to understand why. The brand has seen visits recover much faster than Macy’s and there is little doubt that the outdoor orientation has helped.

However, the assumption that this is a cure-all is misguided. The other key advantage that Kohl’s has is a value orientation, one that pushes the brand closer to the T.J. Maxx’s of the world than the Neiman Marcus’s. And this is seemingly not the direction that Macy’s plans to take. Instead, its plan is to shift upmarket to grab market share left available by high-end closings from Barney’s, Lord & Taylor, and others. So, what are the key factors to watch? Simply put, where Macy’s chooses locations will reveal its true intentions. If the aim is a standard outdoor center, the process could include an aim at value-oriented apparel. If instead, they focus on higher-end areas or centers, the push to grab luxury market share could be on.

Bed Bath & Beyond – Footprint Optimization

It was recently announced that Wade Haddad will have the task of optimizing Bed Bath & Beyond’s retail footprint. And from a quick survey of locations, it looks that the process could quickly yield benefits. Critically, the process of optimizing a retail footprint should be less related to the performance of a given store and more to the ability of other locations to effectively serve those audiences. In short, it’s about maximizing reach from the smallest number of locations.

Looking at examples of Bed Bath & Beyond locations in Texas and Florida show that several have clear overlaps that could potentially be addressed with closures or even relocations. And with the brand’s clear recognition of the importance of distribution and fulfillment, expect the importance of reach to take center stage.

Return of the Movies

This has clearly not been a great time for movie theatres. Yet, there are factors that could provide a route to success for brands like AMC. Extended periods of economic uncertainty tend to benefit theatres as a low-cost means of entertainment in tougher times, and we are certainly in such a period. And while this sector will depend on a fuller recovery from COVID more than most, there are signs that people miss theatres.

Over the last two weeks, AMC locations have seen week-over-week jumps of 38.0% and 8.9%, and while visits are still way down year over year, they are improving. On September 2nd and 3rd, visits were down 57% and 71% year over year, a marked improvement from August 31st, when they were down 88%. Does this mean the sector is saved? No. Does it mean there is a path to regenerating excitement? Yes.

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