NEW YORK (Real Money) -- Maybe Macy's (M) had more days between Thanksgiving and Christmas than other retailers did? Maybe their stores had better weather than did other national chains across the street?
You have to shake your head at first when you examine the Macy's numbers, because they, alas, seem too good to be true. That's especially given the odd contrast of Bed Bath & Beyond (BBBY), the consistently good retailer that reported disappointing earnings Wednesday night and posted comparable-store sales that were almost literally half of what Macy's was able to bang out.
However, when you have sat down with CEO Terry Lundgren as many times as I have done in the last few years, you know that Lundgren saw a lot more changes coming to retail than just about anyone else did -- including Bed Bath, for that matter.
Lundgren, who is one of my Bankable 21 -- the 21 CEOs in Get Rich Carefully that I say you can bank on to win for you -- understood something crucial. Namely, if Macy's was going to be a successful and prevail as a 21st-century retailer, it was going to have to change radically.
That's why he looked at the universe of stores and decided that Macy's could go national on purchasing clout from suppliers, but that it needed to stay local when it came to customers' needs. I think a lot of the skeptical investor class didn't believe Lundgren when he stressed his "My Macy's" initiative, which entailed bolstering local sales by having the amalgam of department stores atomize into the local roots that had once predominated.
Remember, Macy's was initially cobbled together in an almost automaton way: A bunch of local retailers were gathered under one nationwide roof. That was an excellent business decision when it came to the ability to wrangle with such names as VF Corp (VFC) and the PVH (PVH), but it wasn't so strong in when it came to any attempt to distinguish Macy's from the pack of similarly stocked competitors. So Lundgren reinvented the paradigm in a way that companies like Sears (SHLD) or Kohl's (KSS) or Wal-Mart (WMT) or Target (TGT) can only hope to do: Macy's has tailored the merchandise for the locale. It's working.
More important, perhaps, was Lundgren's very aggressive decision to go "omnichannel" and to mean it, meaning that Macy's was going to adopt "a can't beat them, join them, and then figure out a way to beat them" approach to the Web. Now Macy's, because of all of its marketing power, offers great prices for premium proprietary product right on the Web. You can then pick it up, or Macy's can send it to you, or you can return it using the physical store presence. For those of us who shop online, we know the bane of our existence is the "return." If we don't like it, what are we supposed to do? Shlep down to the UPS (UPS) or Container Store (TCS) or something?
Macy's has a solution to that, as it does for getting the merchandise to you from another store that might have more inventory of a particular item. I am sure the northern stores were busy helping out the southern stores with cold-weather-apparel inventory -- that is, if they had enough left to dole out to the south, given the brutal weather.
And the layoffs? As with everything Macy's does, this is about technology and streamlining trumping overhead and excess labor costs -- making tech do more with less. Oh, and just like everything else Macy's does, the shareholders will reap the rewards. One of the best chief financial officers out there, Karen Hoguet, will be sure to plough the savings into the right portion of the capital structure, and hopefully a share buyback, given that the stock only sells at 11x this year's number.
Bed Bath, on the other hand, seems to have been caught flat-footed by the Internet, and it still has no real strategy to deal with it, as was painfully obvious from the always-truncated conference call. The company's answer to the slash in comps growth? Opaque, except perhaps for a strategy of more couponing. Bed Bath is a terrific bricks-and-mortar retailer but, as Lundgren tells you, that's not enough in a world that's so rapidly migrating to the Web.
How good are Macy's and Lundgren? The retailer stocks have been going down ever since Howard Schultz from Starbucks (SBUX) told us about a secular decline in shopping-mall traffic that he saw at holiday time. Mall-based Macy's saw it coming, too. Like Schultz and Starbucks, it has come up with its own defense, and offense, to combat that decline in a positive way for believing shareholders.
At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long M.
Editor's Note: This article was originally published at 7:32 a.m. EST on Real Money on Jan. 9.