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Macy's to Cash In on the Holiday Season

Zacks Equity Research

Catching up on the saying “early bird catches the worm”, Macy’s Inc. (M) will open its stores at 8 p.m. on Thanksgiving evening for the first time. This holiday season, the company intends to draw shoppers who start early and seek attractive deals. The move is a strategic attempt by the department store retailer to take a more competitive stance against its brick-mortar and online rivals.

Other retailers that count upon a similar game plan include Target Corporation (TGT), Wal-Mart Stores Inc. (WMT) and The Gap, Inc. (GPS). Retailers need to be ‘hawk-eyed’ this holiday season to make the most of it. They need to capitalize on every opportunity as and when they arise, and try to attract cautious, budget-constrained consumers to the stores as the season may be a tough one.

What further makes this holiday season challenging for retailers is the time frame, as 2013 presents only 25 days between Black Friday and Christmas as against 31 days last year. Moreover, retailers, which witness more traffic during weekends, will have only 4 full weekends this time around versus 5 in 2012.

We believe retailers will leave no stone unturned to tap this holiday season. Be it early-hour store openings, promotional events, free shipping on online purchases or heavy discounts, retailers will try all tricks to boost sales.

Earlier, Macy’s holding a Zacks Rank #4 (Sell) stock stated that it will deploy approximately 83,000 seasonal staff members for its Macy’s and Bloomingdale’s outlets, call centers, distribution centers and online fulfillment centers, portraying a 3.8% increase from the last year, when the retailer appointed about 80,000 associates.

Higher sales generated through the company’s Omnichannel business strategy has led to the allotment of more seasonal associates at online fulfillment centers. This year about 6,600 seasonal employees will be appointed at four online fulfillment centers, while 1,200 seasonal workforces will be stationed at fulfillment areas of 500 Macy’s outlets to manage orders and make the merchandises available at the customer’s door step. 

Retailers seem skeptical about the holiday shopping period as the economic improvement is short of expectations, which could have led to higher consumer spending. Consequently, retailers are busy bracing themselves for a tough shopping season.

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