Department stores expand off-price concepts

Macy’s reported in its year-end earnings call that it plans to expand its Backstage off-price concept to 100 more stores this year. (And Backstage is located inside existing Macy’s locations.) Here’s what I had to say on RetailWire about the wisdom of this trend:

There is a big difference between what Nordstrom and Kohl’s are doing (building out freestanding Rack and Off/Aisle stores) and what Macy’s is attempting by locating its Backstage concept inside its full-line stores. Either way, department stores are jumping on the off-price bandwagon because it’s a hot segment with the “treasure hunt” experience that some shoppers are looking for. But at what point does the segment get overcrowded?

Macy’s may feel strongly enough about Backstage to roll it into more locations, but from my experience it does nothing to enhance the overall store “brand.” (Bob is dead-on regarding the housekeeping.) And the merchandise content is not compelling, since Macy’s “upstairs” brands feel safer dealing with TJX than having their goods show up in Backstage. From what I’ve observed, there is a lot of closeout product from brands that you might find at JCP or Kohl’s but not on the main floor of Macy’s.

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