Editors' pick: Originally published Nov. 25.
At long last, Macy's (M) - Get Report has opened outlet locations in a bid to grab the shoppers typically reserved for the aisles of off-price king TJX Cos. (TJX) - Get Report and to make better use of its vast floor space.
The company launched the Backstage off-price concept last fall via six free-standing stores. The store's merchandise, which includes home decor, shoes, sunglasses, baby gear, bedding and packaged snacks, is purchased by a separate "off-price organization," according to Macy's. More recently, the company shifted its focus to opening the Backstage concept inside full-price Macy's stores.
Macy's Chief Financial Officer Karen Hoguet told analysts on a conference call this month that the company won't be opening anymore free-standing Backstage off-price stores in the near future. Instead, Macy's will open Backstage shops inside of its department stores in order to maximize the store's productivity, said Hoguet. This fall Macy's will open Backstage shops inside 45 of its stores.
TheStreet stumbled upon one of the Backstage locations on the second floor of a Macy's store in Massapequa, N.Y. Suffice it to say, it was a fascinating experience for a writer that grew up only knowing Macy's as a department store.
Macy's has never been a big toy seller. At Backstage, however, toys greeted us at the entrance on the eve of Black Friday.
Not a bad attempt at playing Toys R'Us, Macy's.
Buy one, get one free on mostly private label coats is a pretty good deal.
Let the treasure hunt for a great winter coat begin.
Having Backstage on the second floor of a full-price Macy's store has one advantage: Workers could easily transport unsold seasonal goods such as bathing suits. As a result, it means Macy's could turn its unsold inventory into dollars quicker than in the past.
Yes, that sign on the right says sweaty swag.
Backstage has a little bit of everything, from random clothing such as bathing suits in the winter to home goods like cups. The stores feel a bit messy as Macy's tries to tap into the treasure hunt allure of TJ Maxx and Marshall's.
So weird to see a Macy's outlet!
The home decor section closely resembled a Marshall's mixed with HomeGoods (which also is owned by TJX).
Home sweet home at a Macy's outlet.
Again, the store feels messy -- in this example, home decor sits in the same department as shoes.
Love the grey chairs.
Macy's makes a strong showing in mostly non-name brand toys. Great for profit margins.
Would have loved to see some of Hasbro's Nerf guns here.
Searching the kids apparel section was challenging as things were just thrown on the racks. But the prices were good.
Lookout Children's Place.
The odds and ends section at Backstage.
Beer pong in a box -- yes please!
The Backstage outlet takes up about 25% of the second floor. Walk through this makeshift gate ...
The deals were on the amazing side.
.... And you are greeted by pricey Michael Kors (KORS) clothing. Macy's is sending a mixed message to consumers here -- why pay full-price for a Michael Kors sweater if it's going to be buy one, get one free at the Backstage outlet a few steps away within weeks?
Macy's may want to consider erecting a wall that blocks off its Backstage outlet stores from its traditional department stores to avoid any confusion among consumers.
The new normal: Michael Kors stuff on sale.