It took a while for Macy's (M) to enter T.J. Maxx's off-price retail domain, but now that it has seen what it's all about, executives have decided to take a different path in exploiting people's thirst for super discounts on name brands. T.J. Maxx is owned by TJX (TJX) .

Macy's CFO Karen Hoguet told analysts on a conference call Thursday that the company will not 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. 

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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 selected 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 (see Instagram post below).
 
 

#macysbackstage #backstage #sws #grandopening #weareready

A photo posted by Luciana Maneri (@luccimusic) on

 

Mall gig @macysbackstage good vibes, fun customers �� #towneastmall #macysbackstage

A video posted by Manuel Rodriguez (@djmroddallas) on

 
Macy's opened the first two of these store-within-a-store formats in its stores in Nanuet, NY, and Waterbury, CT during the first quarter. It then opened four more in the second quarter, and originally had plans to set up nine additional locations later in the second half of 2016. If the strategy works Macy's has said it would likely roll out 250 to 300 Backstage stores in its full-price locations over time.
 
Indeed Macy's using Backstage to lure in discount hungry consumers -- which have fueled sales at T.J. Maxx's now over 2,100 U.S. namesake and Marshall's stores for years -- is not a bad idea.
 
Macy's third earnings, excluding one-time items, came in at 17 cents a share. That badly missed Wall Street forecasts for 41 cents a share. Net sales tallied $5.63 billion, down 4.2% from the prior year, and relatively in line with forecasts. Same-store sales fell 2.7%, but were narrower than estimates that called for a 3.4% drop. 
 
The company reiterated its full-year earnings outlook of $3.15 a share to $3.40 a share. It now sees same-store sales for the full year falling as much as 3%. Previously, sales were seen declining up to 4%.

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