After 13 years, Macy’s CEO Terry Lundgren, will step down from his post amid a rough patch for Macy’s as the retailer works to meet modern demands.
Lundgren will transition the role to Jeff Gennette, currently president of Macy’s, Inc., in the first quarter of 2017, a move the company said Thursday was part of a succession plan that included bringing Gennette on as president in 2014.
After next year’s first quarter, Lundgren will continue on as executive chairman, working closely with his replacement. Gennette joins Macy’s board of directors effective Thursday.
“I have been honored to lead this enterprise through a period of unprecedented reinvention. While our company is larger, stronger and more resourceful than we were 13 years ago, now is the time to reset our business model to thrive in a future that is being driven by rapid evolution in consumer preferences and shopping habits,” Lundgren said. “Our company must and will change in response to the profound secular forces that are driving consumer spending. I am firmly committed to, and invigorated by, the process we have begun to set a going-forward strategy in lockstep with our evolving customers.”
Macy’s has been facing declining sales as it struggles to get shoppers into stores. First quarter sales for the period ended Apr. 30 fell 7.4% to $5.77 billion and the company cut its profit forecast for the year to between $3.15 and $3.40 down from its previous guidance of $3.80 to $3.90.
In its earnings statement in May, Macy’s said it would speed up or scale up things that are working, excite customers with more newness and cut back on expenses to improve performance in 2016.
Lundgren said Thursday that he and Gennette are “closely aligned” on creating a path forward and that the team will work to implement those future plans.
Gennette, 55, has been with Macy’s for 33 years, holding roles ranging from his start as an executive trainee to chairman and CEO of Macy’s West in San Francisco and Macy’s chief merchandising officer before taking his post as president of Macy’s Inc. in March 2014.
Macy’s lead independent director Marna C. Whittington said Gennette is “uniquely capable” of leading Macy’s in its next chapter, given his “in-depth knowledge of the organization, his merchandising acumen and clear insight into the evolution of the retailing landscape.”
“This is the time for us to be laser-focused on what is most important to our customers, and how we can best deliver the shopping experience that will secure our position as the premier omnichannel retailer of the future,” Gennette said. “We have successfully navigated our way through changing customer trends in the past and there is no doubt that Macy’s, Inc. will need to be a significantly different retailer in the future in the way we operate and approach the marketplace. But we also must continue to tackle our immediate priorities with vigor and discipline. Terry and I have an outstanding relationship and we will continue to collaborate closely through this CEO transition process.”
Macy’s said Lundgren and Gennette will work on improving current business trends and “setting the stage for changes that will be announced as decisions are finalized.”