Macy’s board of directors has voted to appoint Jeff Gennette CEO of the retail giant.
Gennette was selected to follow Terry Lundgren in this role back in June. Gennette began his retail career at Macy’s as an executive trainee in 1983. He moved up the ranks to chief merchandising officer in 2009. In 2014, he became president, a title he will retain.
“I’m honored to be taking on this role and excited about Macy’s prospects. While we certainly have our challenges, we also have great assets and opportunity. No company is better up to the task of re-invention than Macy’s,” Gennette said.
“Jeff will be a terrific CEO for Macy’s, Inc. He has a deep knowledge of this company, coupled with the vision and determination to continue Macy’s transformation for the next generation,” Lundgren said in a statement. “Jeff has a proven track record as a successful retail operator, seasoned merchant and business leader and has contributed significantly to the company’s long history of success.”
Lundgren had been in this role for 13 years. He remains on the board and holds the title of executive chairman.
“I told the board, I’m ready to go when you want me to go,” Lundgren told the Wall Street Journal, speaking about his role on the board. “But having been CEO for 13 years puts me in a unique position to be helpful.”
Lundgren, who is synonymous with Macy’s, had been CEO and chairman since January 2004 as well as president and CEO between 2003 and 2014. His history with the company extends back to 1997 when he served as president and chief merchandising officer. Lundgren was at the helm when Federated Department Stores merged with May Company to create the current Macy’s chain, which replaced store nameplates across the country.
With the new title, Gennette inherits an ongoing challenge. Macy’s and the larger retail landscape are trying to pull out of a downward spiral that have made store closures and bankruptcies the norm. Increasingly, traditional retailers are being passed up in favor of fast fashion, which provides consumers with the constant dopamine drip of newness they need. Meanwhile, e-commerce is disincentivizing shoppers from wiling away hours at the mall, and promotions are eroding margins. For retailers like Macy’s, which are deeply invested in retail space, they have to figure out how to make the stores relevant, appealing and productive.
At Macy’s, the result is persistent comp store sales declines. As result, the retailer is in the process of closing 100 doors, which have a combined sales volume of $1 billion, to be better able to invest in the remaining locations and online channel. The chain recently entertained a takeover offer from competitor Hudson’s Bay Company.
To help right the ship, Gennette expressed his plan to streamline promotions, corral clearance goods into designated spaces, increase private-label selections, boost beauty offerings, and increase the number of licensed departments in its stores, which include Sunglass Hut and LensCrafters.
“We certainly don’t have our head in the sand, and we’re looking outward as much as we’re looking inward to where the opportunities might be,” he said, speaking at a Bank of America Merrill Lynch Consumer 2017 Retail & Tech Conference. “In the past where we may have done things over again and hope it was a cyclical change, we certainly now know that all these changes are secular.”