After 13 years at the helm of Macy’s Inc., CEO Terry Lundgren will hand the reins over to Jeff Gennette in the first quarter of 2017. Lundgren will continue as Executive Chairman and will work side-by-side with Gennette, who will take the titles of President and CEO of the iconic department store retailer.
While Lundgren’s resignation is being framed as part of a long-term succession plan, Macy’s (along with other department stores) has had its share of struggles recently as it faces fierce competition from Amazon and a long-term shift in consumer buying behaviors. In Q1, Macy’s same-store sales dipped 6.1%, the fifth quarter in a row this figure has declined.
It’s also possible that Lundgren’s departure represents a simple changing of the guard: “I do think Mr. Lundgren has been working on a secession plan for several years.,” said Paula Rosenblum, Co-Founder and Managing Partner at RSR Research in an interview with Retail TouchPoints. “You can see that his successor is coming from within the company. I believe Gennette was always his heir apparent. I would not assume this had much to do with the company’s recent performance…it’s just part of the natural progression of the Boomer generation out of the workforce.”
Gennette will join Macy’s board of directors effective June 23, 2016, and will assume additional management responsibilities during the transition period, including oversight of the retailer’s stores organization.
“I have been honored to lead this enterprise through a period of unprecedented reinvention,” said Lundgren in a statement. “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. Our company must and will change in response to the profound secular forces that are driving consumer spending.”
Like many other department stores, Macy’s has struggled in the early part of 2016. In Q1, the retailer had an overall sales decline of 7.4% and a same-store sales dip of 6.1%. The retailer has also had recent shakeups in its C-suite, including the April 2016 departure of CMO Martine Reardon.
More recently, Macy’s narrowly averted a strike at its flagship New York City store and four other area locations, reaching a four-year deal with the Retail, Wholesale and Department Store Union that represents nearly 5,000 workers at these stores.
Long Experience With Macy’s
Gennette was named President of Macy’s Inc. in March 2014 after serving as the retailer’s Chief Merchandising Officer since February 2009. Prior to that he was CEO of Macy’s West in San Francisco. Gennette began his retail career in 1983 as an executive trainee at Macy’s West.
“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,” said Gennette. “We have successfully navigated our way through changing customer trends in the past and there is no doubt Macy’s Inc. will need to be a significantly different retailer in the future in the way we operate and approach the marketplace.”