Now mentioning Messi , most people will think of Argentina football superstar Leo Messi.
But in fact, there is also a "Messi" in the United States. It became famous even earlier and has a history of 163 years. It is Macy's, one of the most famous department store chains in the world and was once known as the "world's largest store."
Macy's is a high-end department store in the United States, mainly engaged in clothing, shoes, hats, and home decorations. Although Macy's is much smaller than Walmart , it enjoys a very high reputation in the United States with its high-quality service concept.
In the history of world retail, Macy's can be regarded as a "mileage" existence.
However, in recent years, its development has been much worse than before. On the one hand, the turnover has declined and the market value has shrunk significantly. On the other hand, due to the impact of the epidemic, stores have closed a large number of stores.
Although 2021 has improved slightly, compared with the peak period of development, the glory of the day has long disappeared.
The century-old history of Messi's rise and fall is, in a certain sense, a microcosm of the era of contemporary retail in the United States.
The former retail giant is now in a mess to save himself. What factors are behind this decline in performance?
This century-old store has changed from rise to decline. Is it a problem with its own operations? Or is it caused by the external environment in a larger sense?
Is the traditional American retail industry really facing a "big defeat" situation? To understand these issues, we have to start from the beginning.
1. The road to the rise of century-old stores The story of Macy's Department Store was born in the wave of department store openings caused by urbanization in the United States.
1858, Rowland Hussey Macy, then 36 years old, opened a grocery store after his own name "Messi", at the intersection of 14th Street and 6th Avenue in Manhattan, New York. This is the predecessor of Macy's department store .
Messi has great experience in how to run this grocery store. In just one year, the store's annual sales reached an astonishing $85,000. The development after
is even smoother. Macy's grocery store continues to expand in scale and the variety of goods is also increasing. This small grocery store finally formed the primary model of "department store".
In 1895, Macy's was acquired by two brothers, Isidor and Nathan Straus, who opened a porcelain store.
The two brothers expanded the Messi store, which had already begun to take shape at that time, and in 1902, moved the Messi store to the junction of 34th Street, Broadway Street and 7th Avenue in Midtown Manhattan, namely Manhattan Pioneer Plaza, and at the same time it was officially renamed "McS".
This 9-storey Messi building has extraordinary magnificent style and pioneered the installation of 33 elevators and 4 wooden escalators. This is also the first store in the United States to adopt elevators. It was once known as the "world's largest physical super department store" (this title gave way to the "New World Shopping Center" in Busan, South Korea in 2009).
In 1924, Macy's held a Thanksgiving parade for "Black Friday", which attracted thousands of people to watch, and this tradition has been preserved to this day.
There is also a tragic story about Macy's.
1912, the Titanic sank into the Atlantic Ocean, and Isidor Straus, one of the founders of Macy's, and his wife were also killed in this famous shipwreck.
A scene in the movie "Titanic" - the sea water overflows the room, and two elderly couples hug each other safely in the bed. The prototype is the Strauss couple.
Of course, this is just an off-topic. Macy's, which has developed well, continues to carry out various mergers and acquisitions with great fanfare and expand rapidly in the markets across the United States.
In the 1840s, with the end of World War II , the US commercial economy was pushed to a climax, the retail industry grew rapidly, and department store sales rose sharply.
After the early merger and acquisition expansion layout, the scale effect was undoubtedly revealed, and thus became an industry giant in this round of rapid growth period of the retail industry.
In the late 1970s and early 1980s, the originator of the department store industry: Sears 's annual revenue accounts for 1% of the US GDP (now Amazon also accounts for only 0.8%), becoming the world's largest department store retailer, with Macy's following behind.
At that time, Walmart was just a regional small supermarket in the Midwest.
htmlSeales, the retail boss in the early 1980s, had five times the revenue of Walmart. In the 1980s, the retail market began to undergo new changes. Chain stores, supermarkets, and warehouse-style membership stores began to emerge, and the retail industry began to gradually subdivided. Under this situation, department stores were hit the most, and the retail industry in the United States entered the era of large mergers.Walmart emerged at this time. According to incomplete statistics, the number of Walmart stores surged in the past few years from 1981 to 1989 alone, and the stock price increased by 45 times.
Finally, in 1990, Walmart surpassed Sears and took the first place in retail in the United States.
The subsequent 1990s became the stage for the performance of warehousing member stores. Costco (i.e. Costco) stock price rose 649%, and Walmart performed even more, up 1034%.
But unfortunately, during this period, we have found no trace of Macy's. In the explosive growth of emerging markets in the retail industry, Macy's did not seize any opportunity, and what it holds is still the old thinking of the department store industry: horizontal mergers and acquisitions.
In the market tide, if you don’t advance, you will retreat.
In 1992, Macy's had to file for bankruptcy due to business problems. The company was divided into two parts: the eastern part and the western part, waiting for the buyer to take over and carry out asset restructuring.
However, in line with the old saying in China, good luck will help you, and Macy's Department Store was lonely and met with support from noble people.
On Christmas Eve in 1994, Macy's was included in the company by the Federated Department Stores, which it once intended to acquire, and was reorganized.
In view of Macy's brand reputation, United Department Store decided to continue to operate under the name of "McD".
. Macy's, which has experienced the acquisition, also performed strongly this time, with net sales increasing from $7.08 billion in 1992 to $15.05 billion in 1995.
Macy's has gained a new life and soon returned to the ranks of retail enterprises.
Medall Macy's re-rise has allowed the acquirer "United Department Store" to see that the department store industry still has some achievements, so she continued to increase its investment. In 2005, it spent $11 billion to acquire May Department Stores Company, another North American retail giant, into its subsidiaries.
After this acquisition, United Department Store actually controlled more than 1,000 department stores, with annual sales of nearly US$30 billion, second only to Sears Department Store in terms of quantity.
In order to standardize its operations, it also attracted the brand power of Macy's Department Store. United Department Store renamed all the more than 300 Mei's Department Stores acquired this time to Macy's Department Store.
However, all this is far from over. At the end of February 2007, United Department Store announced that it would rename "United Department Store" to "Messi Group Company".
is owned by department stores, two major brands: Macy's and Bloomingdales.
In 2015, Macy's market value reached US$24 billion, reaching its "peak period" in its century-old history.
2, with a strong rise and decline, and a lonely development for 163 years, Macy's has followed the trend of historical progress and achieved great success.
But at the same time, because of his self-satisfaction and confusion in his old business philosophy, he missed many development opportunities, which led to his final fall into the current development dilemma.
Macy's, which has experienced ups and downs, is still obsessed with the old path of horizontal mergers and acquisitions to find new growth points in performance, but ignores one of its fundamental problems: low operating efficiency.
and it has never taken the step of developing upwardly and broadening channels.
In 2015, Macy's reached its peak in its career, but no one expected that this was a return to the forefront. Since then, it has completely gone downhill, followed by waves of store closures.
As the saying goes, success is Xiao He and failure is Xiao He. One of the magic weapons for Macy's success is horizontal mergers and acquisitions, so as to achieve the purpose of expanding the market.
In 2015, Macy's also made a decision: to enter the Chinese market. This time he did not adopt the same horizontal merger and acquisition, but adopted a horizontal cooperation: to cooperate with Hong Kong Feng's Group to establish Macy's China Company, which holds 65% of the shares and Feng's Group holds 35%.
At that time, China's retail market and e-commerce industry were booming, and Macy's completely ignored its own advantages and disadvantages. Faced with China's vast market, it was eager to achieve success and blindly transferred all its businesses to the online e-commerce platform. In August, it reached an exclusive strategic cooperation with Alibaba . In the same year, on Double 11, it officially entered Tmall . In 2017, it launched an independent official website and implemented the "official website + Tmall" dual channel strategy in the Chinese market.
But no one knows that in the Chinese Internet retail market in 2015, e-commerce giants represented by Ali , JD , and Suning have been in the market for many years. As an outsider, Macy's Department Store entered at such a point in time and wanted to leverage this market, the difficulty can be imagined.
Moreover, Macy's own operating ideas are too outdated, intending to simply copy the operating style in the United States, which seems out of place with the Chinese market and cannot stimulate the purchasing desire of Chinese consumers at all.
After three years of hard work, Macy's Department Store issued an announcement that the official website would stop operating. Half a year later, Tmall's official flagship store announced its closure, and its pace of entry into China completely failed.
For Macy's, the worst result is far from this. The setback in the Chinese market is just the beginning. Macy's, which has insufficient cash flow in and , is also in trouble in the United States. In order to protect itself, it has to close hundreds of stores and lay off nearly 100 senior executives.
As the new crown epidemic swept the world, in the "hard-hit area" of the United States, Macy's is even more uncomfortable, and its operating effect is deteriorating. Macy's has no practical and effective solution to this, so it can only choose to continue laying off employees and continue to close stores.
At the end of March 2020, S&P Dow Jones Index said that after investigation, since 2019, Macy's operating conditions have gradually deteriorated, with operating cash flow of US$1.6 billion the lowest in previous years. It decided to move Macy's out of S&P 500 index .
The former retail giant has fallen to this point, and CNBC directly used the word "shamed" in the report to describe the situation where Macy's was tragically expelled. The scenery of "the world's largest store" has long been blown away by rain and wind.
In fact, Macy's is not the only one who encounters this embarrassing situation at present. For traditional offline department stores, the impact of online shopping is undoubtedly fatal, and countless physical stores can only choose to close their doors without help.
coupled with the repeated and changing epidemic impact, the crisis in major department stores has been rapidly expanded infinitely.
In this retail industry crisis, retail companies with strong e-commerce businesses such as Walmart and Amazon are hard to resist. For Macy's, which only accounts for 1/5 of the revenue of e-commerce businesses, whether it can continue to survive is the key, and the gap between it and Walmart will also widen.
The good news is that from the released second quarter 2021 financial report, it can be seen that Macy's is returning to its pre-epidemic level. The less good news is that its performance before the epidemic is actually not dazzling.
In the new retail era where competition is more cruel, if Macy's cannot stand out from the dilemma faced by the traditional retail industry in the United States and continue to decline, it means that the traditional model that has been maintained for hundreds of years will come to an end.
