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Macy’s to Test Backstage Concept in 45 Stores in Q4

Photo: Courtesy of Macy's
Photo: Courtesy of Macy’s
Macy’s is hoping its off-price offshoot, Backstage, will help it have a happier holiday season this year.

During an investors’ call discussing the department store retailer’s third-quarter results, chief financial officer Karen Hoguet revealed plans to put Backstage pop-up apparel shops in around 45 Macy’s stores in Q4.

“This merchandise will be put adjacent to our Last Act clearance areas and, like Last Act, will be coupon free,” Hoguet said.

Backstage, which debuted in Fall 2015, sells men’s, women’s and children’s apparel, shoes and accessories (most of which isn’t carried at Macy’s) at between 20 to 80 percent off regular prices. There are currently 22 Backstage stores around the U.S.—19 of which are located inside Macy’s—meaning that the new pop-ups will bring its tally to 67.

“The test that we’re doing this fall with those 45 stores in putting men’s and women’s apparel purchased by our Backstage buyers the way that they do, and putting that merchandise next to Last Act and, like Last Act, being coupon ineligible, we think is going to be an interesting test to see about bringing new product in,” Hoguet said, noting that 13 of the pop-ups will also feature product not sold in a typical Macy’s, including toys and pet accessories.

She also divulged that Macy’s Backstage strategy going forward will be less focused on standalone stores and instead utilize the retailer’s existing assets.

“We’re getting such success in store because not only is Backstage doing well, but it’s improving the productivity of most of the base stores, which is a good thing,” Hoguet said. “So that’s where we’ve decided to put our focus, at least for now.”

Macy’s Q3 sales totaled $5.6 billion, down 4.2% from $5.87 billion in the same period a year ago. Nonetheless, the company’s stock (M) is up more than 18 percent year-to-date.