Macy’s to open 450 in-store Finish Line shops
Cincinnati — Macy’s Inc. announced on Friday that Finish Line Inc. would be the department store retailer’s exclusive athletic footwear partner, opening in-store shops in more than 450 Macy’s stores nationwide. The merchandise will also be available online at macys.com.
Under the agreement, Finish Line will be Macy’s exclusive partner for men’s, women’s and kids athletic footwear and Macy’s will be the exclusive host for Finish Line-branded in-store shops.
“We believe the enhanced footwear assortment they will bring to our customers at every full-line Macy’s store nationwide, as well as on macys.com, complements our rapidly developing offering of activewear merchandise,” said Jeff Gennette, Macy’s chief merchandising officer. “With Finish Line on our team for athletic shoes, Macy’s will be a comprehensive and compelling destination for footwear across all categories – from dress to casual to comfort to athletic – for men, women, and kids.”
The rollout of the shops, which will be operated by Finish Line as leased departments, will start in spring 2013 with completion expected by fall 2014. (For the remaining approximately 225 Macy’s stores that carry footwear, Finish Line will manage the athletic footwear assortment and inventory beginning in spring 2013, without the staffing or branding provided in the leased departments.)
Finish Line will recognize sales and corresponding profits, less the licensing fee paid to Macy’s. Longer term, this agreement is expected to result in additional sales to Finish Line of $250 million to $350 million annually.
The agreement comes as Macy’s rival J.C. Penney has launched the first wave of its branded in-store shops, starting with Levi’s, Liz Claiborne and Izod. J.C. Penney eventually plans to transform its stores into a collection of some 100 branded shops.
CEO, merchant succession in place at Tractor Supply
Tractor Supply Company president and COO Greg Sandfort will succeed James Wright as CEO of the 1,135 store chain effective January 1.
The nation’s largest retail farm and ranch store chain on Friday morning confirmed a management succession planned it had telegraphed for years. Current president and COO Greg Sandfort will assume the role of president and CEO on January 1 and join the board of directors. He replaces current chairman and CEO James Wright who will transition to the role of executive chairman for a one year term. In addition, SVP of merchandising Steve Barbarick was elevated to the role of EVP of merchandising. Barbarick joined Tractor Supply as a buyer in 1998 and was named vp/dmm in June 2003 and svp of merchandising in May 2009.
Sandfort joined Tractor Supply as chief merchandising officer in November 2007 and has been instrumental in the company’s ability to effectively grow sales and operating margins while improving operating efficiencies and inventory productivity, according to the company. He was named president and CMO in February 2009 and became president and COO in February 2012. Sandfort came to Tractor Supply from Michaels Stores where he served as president and COO. Prior to Michaels he spent time with Sears and Federated Department Stores.
Wright is relinquishing his role at the company after a career that began in October 2000 when he was named president and COO. Wright, was named CEO in October 2004 and he assumed the role of chairman in November 2007.
Sandfort will have large shoes to fill at Tractor Supply as Wright oversaw a decade of dramatic growth at the specialty retailer. During his tenure, Tractor Supply grew revenues from $759 million in 2000 to $4.2 billion in 2011, increased market capitalization from $80 million in 2000 to its current level of $6.9 billion and expanded the store base from 305 stores at the end of 2000 to more than 1,135 stores today.
"It has been an honor to serve Tractor Supply Company through the successful growth of our unique retail concept," Wright said. "Tractor Supply is strongly positioned competitively, operationally and financially. With the talented team we have in place today, this is an ideal time to complete our planned management succession plan."
Sandfort said he looked forward to building on the momentum the company achieved under Wright’s leadership and indicated he is aligned with his predecessor on strategy.
"We have built a stable and differentiated business model that serves a unique niche in the retail marketplace," Sandfort said. "I am confident that this will be a smooth transition that enables the company to continue executing its key strategic initiatives that have driven our outstanding performance in recent years."
Spoiler alert: Walmart’s prices lowest to varying degrees
Pricing studies conducted this week by Wall Street analysts yielded familiar results.
Deutsche Bank analyst Charles Grom and Citigroup analyst Deb Weinswig issued reports this week comparing Walmart’s prices to dollar stores and conventional supermarkets and Target.
Grom’s assessment looked at two Dollar General, Family Dollar and Walmart stores in a major Northeastern metropolitan area. He compared a basket of 27 comparable items and determined Walmart was the lowest at $82.75, compared to $83.65 at Dollar General and $87.15 at Family Dollar. The spread versus Dollar General was only 1.1% and 5.3% versus Family Dollar.
"While a small sample size, we believe these checks continue to illustrate that Dollar General remains focused on price investment to drive traffic, a strategy that has paid dividends as the comp gap with peers continues to widen," Grom said. "All told, while the three remain highly competitive in the new markets we visited, Walmart and Dollar General are clearly ahead of Family Dollar on price, though to less of an extent than we had witnessed previously."
Meanwhile, on the other side of the country, the pricing situation revealed by Citigroup’s Weinswig was slightly different as she looked at prices at conventional supermarkets, Target and Walmart stores in the Los Angeles area. Walmart continues to enjoy a material pricing advantage relative to food retailers, but remains challenged by Target where shoppers who take advantage of the company’s loyalty program can pay less than they would at Walmart.
Weinswig observed the gap with SuperValu contracted somewhat, but expanded with Kroger and Safeway. Despite narrowing with SuperValu, the food chain remains 18.5% above Walmart while Kroger was 16.9% higher than Walmart and Safeway was 22.4% higher. However, Target was only 2.4% higher than Walmart, but was actually 2.7% lower for Target shoppers who participate in the retailer REDcard Rewards program which provide a 5% price break at the point of sale.
"Consistent with our prior survey, we believe that the supermarkets in our coverage universe are focused on keeping pace with Walmart’s price investments as they continue to fight for share of the food retail pie, while Target works to gain its footing on price in food," according to Weinswig.