- As one of the oldest and largest department stores in the nation, Macy’s is an icon of American retail. It set precedents and paved the way for several of its peers.
- Despite its dominance, Macy’s hasn’t been impervious to the wrath of the retail apocalypse. In recent years, the department store has struggled to overcome slumping sales and continues to shutter stores around the US.
- Here’s the story of Macy’s rise to iconic American retailer and the factors that caused its recent stumbles.
- Visit Business Insider’s homepage for more stories.
In its nearly two centuries in operation, the Macy’s name has become more or less synonymous with pure Americana.
Since its humble beginnings as a small dry goods store in New York City, Macy’s has pioneered several components of the modern department store, including onsite tailoring, dining, and elaborate window dressings. Today Macy’s operates 680 stores under both its namesake brand and Bloomingdale’s – which Macy’s also owns, along with the e-commerce site Bluemercury – as well as 190 specialty stores across 43 states; Washington, DC; Guam; and Puerto Rico.
Despite its dominance not just in retail but also in popular culture, Macy’s hasn’t been impervious to the retail apocalypse, which has contributed to dwindling foot traffic and slumping sales as consumer preferences shift. Last week, Macy’s announced a major business overhaul that will involve the closure of 125 stores and layoffs for 2,000 employees.
With enduring traditions like the Macy’s Thanksgiving Day Parade and the Fourth of July firework show, it’s hard to picture a future without the company. While the fate of the retailer remains unknown, we took a look at Macy’s meteoric rise and its recent fall.
Macy’s was founded in New York City by Rowland Hussey Macy in 1851.
Foto: sourceArchive Photos/Getty Images
Prior to founding the store, Macy worked on a whaling ship until age 19 before he began working at his father’s store in Massachusetts. In 1844, Macy attempted to open his own store, a needle-and-thread shop in Boston, and later a series of dry goods stores, all of which proved unsuccessful until he opened his iconic New York City shop.
The original store was located on the corner of 14th Street and 6th Avenue.
Foto: sourceKeystone Features/Getty Images
Source: Macy’s
In the following years, Macy began to grow his fledgling business. He started by expanding into 11 nearby buildings and adding merchandise categories.
Source: Macy’s
Macy created the modern department store as we know it today. He is credited with several major contributions to the retail industry.
Foto: Shoppers outside Macy’s.sourceBettmann/Contributor?Getty Images
Source: Macy’s
They include implementing a series of policies that had never been seen before in retail, including buying and selling products using cash only and creating the one-price system rather than bartering.
Foto: sourceNina Leen/The LIFE Picture Collection via Getty Images
Macy was among the first to print the price of goods in newspaper advertisements and offer money-back guarantees if customers were unsatisfied with their purchases.
He also introduced then-revolutionary products to the New York City market, such as the teabag, the Idaho baked potato, and colorful bath towels.
Foto: sourceAP Photo
Source: Macy’s
Additionally, Macy created a made-to-measure clothing operation that produced clothes onsite, essentially instituting the common practice of offering tailoring services at major department stores.
Foto: Women shopping at Macy’s in 1948.sourceNina Leen/The LIFE Picture Collection via Getty Images
Source: Macy’s
In the 1860s, Macy’s became the first retail store to acquire a liquor license and serve beverages onsite.
Foto: sourceBettmann/Contributor/Getty Images
Source: Macy’s
In 1862, Macy’s created the concept of the retail Santa …
Foto: sourceCBS via Getty Images
Source: Macy’s
… and in 1864, the company established the practice of elaborately decorated holiday windows that are still popular today. Thus, the idea of „window shopping“ was born.
Foto: Shoppers stop to admire the Macy’s windows in 1935.sourceBettmann/Contributor/Getty Images
Source: Macy’s
After R. H. Macy passed away in 1877, the Macy family continued to operate the business until 1885, when the Straus family took ownership.
Foto: Jesse Straus, then-president of Macy’s, in 1933.sourceBettmann/Contributor/Getty Images
Source: Macy’s
In 1902, the Strauss family moved Macy’s to Herald Square, to a nine-story store that in the years to come would become an iconic location in pop culture.
Foto: sourceAP Images
Source: Macy’s
By 1924, the store had completed a renovation that officially made it the largest department store in the world.
Foto: sourceBethany Biron/Business Insider
Source: Macy’s
That same year, Macy’s held its inaugural Thanksgiving Day Parade. 10,000 people gathered to watch the first parade, which included animals from the Central Park Zoo.
Foto: sourceMacy’s
Source: Macy’s
Over the next few years, Macy’s began introducing its elaborate floats, which became an essential part of the iconic annual event.
Foto: sourceGeorge Rinhart/Corbis via Getty Images
Under the Straus family tutelage, Macy’s expanded nationally, becoming a mainstay in malls and suburban shopping centers.
Foto: Macy’s at the Mall of America in Minneapolis in 1992.sourceAntonio Ribeiro/Gamma-Rapho via Getty Images
Source: Encyclopedia Britannica
Over the next few decades, Macy’s star continued to rise, as it became a go-to department store destination around the country.
Foto: Employees wrap gifts at Macy’s in 1948.sourceNina Leen/The LIFE Picture Collection via Getty Images
Macy’s continued to gain cultural clout in 1947, as an integral part of the setting of the classic film „Miracle on 34th Street.“
Foto: sourceBethany Biron/Business Insider
Macy’s continued to bring panache to major national holidays when it started it annual Fourth of July fireworks show in 1976.
Foto: The Macy’s firework show above the Manhattan skyline in 2000.sourceRobert Rosamilio/NY Daily News Archive via Getty Images
The first sign of major strife for Macy’s began in the mid-1980s, after a series of missteps including an unsuccessful buyout coincided with an economic recession that left the retailer in massive debt.
Foto: sourceIrene Jiang / Business Insider
Source: Encyclopedia Britannica
Overwhelmed by debt, in 1994 Macy’s merged with Federated Department Stores, Inc., then the largest department store company in the US.
Foto: sourceBethany Biron/Business Insider
Source: Encyclopedia Britannica
Federated operated a slew of local department store companies including Lazarus, Filene’s, and Bloomingdale’s, among others.
Foto: sourcePeter Kramer/ Getty
The 1990s served as a key marketing period for Macy’s, ushering in big-name partnerships with celebrities and supermodels like Kate Moss …
Foto: Kate Moss and fellow model Michael Bergin at the Calvin Klein shop at Macy’s Herald Square.sourceJim Smeal/Ron Galella Collection via Getty Images
… and Sarah Jessica Parker, who served as a face of the athletic wear line Macysport …
Foto: sourceEvan Agostini/Liaison/Getty Images
… and even performances from popular boy bands of the time, like 98 Degrees.
Foto: Nick Lachey, right, performs alongside members of 98 Degrees.sourceRon Galella, Ltd./Ron Galella Collection via Getty Images
In an effort to capitalize on the internet boom, Macy’s launched its e-commerce site in 1997.
Foto: sourceMacy’s
Source: Macy’s
Around this time, Macy’s also beefed up its loyalty program and Macy’s rewards card to attract shoppers.
Foto: sourceAP Photo/Jenny Kane
In 2006, more than 400 stores under the Federated umbrella changed their name to Macy’s, and the store’s national dominance grew. By 2007, Federated decided to rebrand as Macy’s Inc.
Foto: sourceIrene Jiang / Business Insider
Source: Encyclopedia Britannica
In the 2010s, Macy’s began experimenting with new concepts, like its off-price store Macy’s Backstage. Macy’s recently announced plans to grow the fleet.
Foto: sourceAP
Source: Macy’s
However, Macy’s was not able to fend off the retail apocalypse. In January 2015, the company announced it would close 14 Macy’s and Bloomingdale’s stores around the nation.
Foto: sourceIrene Jiang / Business Insider
In 2005, Federated made several critical moves including acquiring The May Department Stores, Lord & Taylor, and Marshall Fields.
In September of that same year, Macy’s announced it would close an additional 40 stores as sales continued to drop.
Foto: sourceIrene Jiang / Business Insider
Stores continued to shutter over the next few years, as the company struggled against dwindling foot traffic and the rise of e-commerce.
Foto: sourceIrene Jiang / Business Insider
In an attempt to bring more people into stores, Macy’s tested new concepts like Story, a rotating pop-up shop it launched in stores in June 2018.
Foto: sourceBethany Biron/Business Insider
Source: Business Insider
In February 2020, Macy’s announced a massive restructuring that would close 125 stores and cut 2,000 jobs.
Foto: sourceIrene Jiang / Business Insider
As part of the new strategy, Macy’s is also closing offices in San Francisco, Cincinnati, and Lorain, Ohio.
The five-pronged, three-year plan is intended to generate savings of $600 million in 2020 and $1.5 billion annually by 2022.
Foto: sourceAP Photo/Gene J. Puskar
Source: Business Insider
It will also involve experimentation with concept stores that operate outside of traditional malls.
Foto: Market by Macy’s in Southlake, Texas.sourceCourtesy of Macy’s
Source: Business Insider
Ultimately, while Macy’s remains standing unlike department stores like Barneys, it still has a long uphill battle ahead.
Foto: sourceReuters/Natalie Behring
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