Macy's Strategic Abercrombie Partnership | Fast Five Shorts
Strategic partnerships are reshaping retail! In this segment from the Omni Talk Retail Fast Five, sponsored by the A&M Consumer and Retail Group, Simbe, Mirakl, Infios, Clear Demand, and Ocampo Capital, Chris and Anne explore Macy's new partnership with Abercrombie Kids for back-to-school season.
With 3x the distribution for Abercrombie and a traffic driver for Macy's, this partnership could signal a new trend of department stores becoming "mini malls." Discover why both hosts love this strategic move and what it could mean for the future of retail.
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For the full episode head here: https://youtu.be/pB45J7EFcCI
#Macys #AbercrombieKids #BackToSchool #RetailPartnership #DepartmentStore #RetailStrategy
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Transcript
Macy's is now selling an assortment from Abercrombie Kids as part of its back to school merchandising.
Speaker A:According to Retail Dive, the collection of jeans, T shirts, dresses, skirts, sweaters, outerwear and accessories will now be available in sizes 5 to 18 in stores and online, according to a Monday press release.
Speaker A:Chris, what do you think of this Abercrombie Kids and Macy's partnership?
Speaker B:Wow.
Speaker B:And you know, I think net net, I like it for both sides.
Speaker B:I really do.
Speaker B:I think numbers wise, you know, numbers wise.
Speaker B:I was looking at the numbers last night.
Speaker B:There are approximately one Abercrombie Kids stores.
Speaker B:There's 350 Macy stores in the US approximately.
Speaker B:So that's like three times the distribution, 3x the distribution for Abercrombie.
Speaker B:So I like that for Macy's.
Speaker B:I like the back to school hook.
Speaker B:It gives people a reason to want to go to Macy's, which I've said has been a consistent problem for the department store in general.
Speaker B:Macy's particular.
Speaker A:Yeah.
Speaker B:And so it gives them a hook over the next couple months.
Speaker B:Abercrombie also gets wider distribution for their inventory at this period of time, which is also important, especially when you look at the macroeconomic conditions.
Speaker B:And it also will get an understanding of where it's selling and what markets it's selling, you know, in the Macy's stores where it doesn't have its own standalone store.
Speaker B:So that could be advantageous in terms of understanding, you know, how it looks as it looks to redefine its store strategy in the long term.
Speaker B:And Macy's, you know, at the end of the day, the funny thing about this story too, Macy's is only doing what it's always done, which is buying brands wholesale from companies that thinks are relevant for the time period.
Speaker B:So you know, and, and does Abercrombie Kids Hollister, Abercrombie itself become also a long term digital marketplace partner of Macy's too, based on the success of this.
Speaker B:Maybe it's something I wouldn't take off the table given how the industry is consolidating and there's strange bedfellows emerging every day.
Speaker B:But this could be proof point number one to that concept potentially over time too.
Speaker B:So, so net.
Speaker B:I don't, I don't think there's, there's anything not to like about this partnership.
Speaker B:But what do you think?
Speaker A:Yeah, I agree.
Speaker A:I mean I think especially for Abercrombie and Fitch kids like it gets them space inside demos that they're going to want to be in without worrying about the overhead and Staffing a whole store and doing all the things at peak times when they want to be there.
Speaker A:This is Back to School is one of the biggest times they'll, you know, I could see them doing something for holiday.
Speaker A:Um, this, this makes complete sense.
Speaker A:And we also significantly reduced their stores not too long ago too.
Speaker A:So this is really giving them the ability to find, you know, give people, give mace people a reason to go to Macy's and for Abercrombie to be able to, to learn from their presence in these Macy's stores without that, that concern about overhead.
Speaker A:Um, I think this is actually, I'm really curious to see and maybe we'll ask.
Speaker A:Ask Ethan Chernofsky at Placer to see what kind of traffic Macy' from that.
Speaker A:Because right now we just shot a Back to School video for fashion's Missing Middle.
Speaker A:And Abercrombie and Fitch kids is definitely the most on trend assortment of product right now based on price.
Speaker A:Like it's a great like product.
Speaker A:It's driving.
Speaker A:There's tons of people in those stores.
Speaker A:And so I think we're going to see a lot of people end up going into Macy's to find this.
Speaker A:Plus it's a better place for product mix.
Speaker A:They can also get shoes there, they can get basics there.
Speaker A:They can get all the things they need while they're inside that at Macy's stores.
Speaker A:But store but are really driven there because of the Abercrombie and Fitch kids being in that market.
Speaker A:So I think it's, it's going to benefit everyone all around.
Speaker A:And I'm curious to see where Macy's takes this next and with what brands they bring in.
Speaker A:Maybe even Abercrombie and Fitch, the adult version like you suggested.
Speaker B:Yeah, who knows?
Speaker B:I mean you can be very smart about that, you know, depending on where the stores are located and you could, you could use Macy's or other avenues to put them in products where you don't want to build stores know or put them in the online sphere too.
Speaker B:You know, I think the online sphere is particularly interesting part of this story to me in terms of how it evolves like you know, next year do they just put it online?
Speaker B:Do they put it in store again?
Speaker B:Like who knows?
Speaker A:Yeah, and we just saw like JCPenney just acquired Aeropostale, Brooks Brothers, some of these other.
Speaker A:So I'm almost wondering if this starts to be a trend that we start to see with the department stores bringing in some of these mall brands to kind of, you know, just consolidate the space during those peak times when it makes sense to.
Speaker B:To department stores become mini malls in and of themselves in a lot of ways.
Speaker B:Yeah.
Speaker B:Which actually, from a convenience standpoint, would make a ton of sense.
