Q: Is there a plan on the table to more aggressively go after the off-price opportunity with free-standing stores? Off-price retailers such as TJX Companies (TJX) continue to be hot.
Gennette: What we recognize is that our core customers are big users of off-price retailers. About two-third of those top customers are also shopping at off-price, and it's part of their shopping diet. Then you have the millennials that we must aggressively go after, 70% of them are also big off-price users. So that's the reality.
We did start with a free-standing off-price concept called Backstage. I would tell you that right now, we are very focused on how we could bring that off-price concept into the mall. The off-price retailers are usually in strips malls next to grocery stores, which is convenient. But, there are people who see malls as convenient. Today what we are experimenting with -- and we started testing in 15 stores last year and are bringing to 30 stores this year -- is bringing Backstage into buildings that have square footage available.
Bringing off-price to a store does have its unique challenges. Number one is that you want to make sure you aren't cannibalizing the sales in which you are already doing in that building. We will be testing four models this year with respect to the entire off-price subject. We expect that we will walk out of the year with a scalable model.
We are committed to off-price, but want to make sure the experience is additive.
Q. With such a busy schedule, how do you unwind?
Gennette: Books, plays, movies are always there. I'm a huge movie buff. I just saw Hacksaw Ridge, which I didn't expect to like as much as I did. Two of my favorite films last year were Moonlight and Hell or High Water—an amazing film, the pace, acting and mood were all very good. I also power-watch certain TV shows and serials.
As an English major, I read a lot of literature. In addition to the business journals and reports, I've recently been reading the collection of short stories by James Joyce, The Dubliners.
One of the beauties of being in New York is having access to art shows and theater, which are so inspiring. Last Sunday, I saw Sunday in the Park With George [about French painter Georges Seurat] with Jake Gyllenhaal. In advance of that, I saw the Met [Metropolitan Museum of Art] Seurat exhibit. It was a nice correlation to see that exhibit before the Broadway show.
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