Despite its nemesis J.C. Penney (JCP) seeing robust crowds at its second consecutive early Thanksgiving Day opening, Macy's (M) CEO Terry Lundgren said he believes his department stores haven't exactly been empty so far this holiday season.
"I think [us opening at 5 p.m.] all worked out best for our employees, and it appears to be that way for our customers as well," said Lundgren in a phone interview with TheStreet. And that is good news for Macy's as it tries to keep Wall Street's newfound optimism over its stock intact.
Coupled with some new deals to sell off prized real estate and rebounding sales in the third quarter, Macy's stock has tacked on a cool 23% over the past month. The S&P 500 has only gained about 2.5% during the same span.
Here's what Lundgren, who will be handing off the CEO reigns to hand-picked successor Jeff Gennette in the first quarter of next year, has seen at Macy's stores across the U.S. since its Thanksgiving Day opening. What follows is an edited and condensed version of our discussion.
Macy's Chairman and CEO Terry Lundgren.
Macy's stores saw their fair share of crowds on Thanksgiving Day.
TheStreet: Does it feel like business has returned to normal after Election Day?
Lundgren: I got to the opening at Herald Square in New York City at 5 p.m. on Thanksgiving. It looked as strong as I have ever seen it at anytime. We estimate there were over 16,000 people waiting outside our store yesterday and they were ready to shop. Right now, I am here at Herald Square and it looks plenty full. We are encouraged by the opening.
TheStreet: My Twitter feed hasn't stopped with photos showing strong crowds at J.C. Penney's early (3 p.m.) Thanksgiving Day opening. How do you respond to people saying that they have won the start to the holiday season?
Lundgren: You just have to make your own decisions. I think if you just keep chasing everyone else's strategy you'll never have your own. We just surveyed our customers and associates and came up with the decision that 5 p.m. was still the right time for us to open even though we knew our competitor was opening earlier than we were. We feel good about that decision -- we wanted to make sure our associates had enough time to watch the Macy's Thanksgiving Day parade and enjoy their Thanksgiving meal.
I think it all worked out best for our employees, and it appears to be that way for our customers as well.
Macy's finally takes watches out from behind the glass cases to try and tempt shoppers.
TheStreet: We are getting data in already that retailers are discounting more this year than last. Are things getting irrational out there in the early going as everyone fights for business?
Lundgren: Our inventory is in a very good position. Last year what we were selling was received in the third quarter and then marked down in the fourth quarter because we had very warm weather. We had so much inventory in the cold weather categories. This year, it's the opposite. We are in very good shape with our inventory. We sold through our inventory as planned in the third quarter, and now everything in the store is fresh.
The goods news here is that we and our vendor partners knew we had to have very sharp prices this holiday season. So we worked with our partners to get those very sharp prices -- we wanted their best product at very, very good prices.
TheStreet: Does it feel weird that this is your last Black Friday as CEO of Macy's?
Lundgren: You know, it doesn't feel weird yet. It probably will when it's next Black Friday and I run to get out bed thinking I need to be in the stores. Right now, it feels pretty much the same. I have been as intensely involved as I have ever been and as enthusiastic as ever. But, you'll have to ask me that question again if you can find me.
TheStreet: We will find you, Terry.