New York (CNN) One of the most prominent jobs in retail will change hands next year.
Macy’s (m) CEO Jeff Gennette will retire in 2024, the company announced on Wednesday.
Gennette, 61, has been Macy’s CEO for seven years. He led the 165-year-old department store chain through the rise of Amazon (AMZN), the Covid-19 pandemic and the industry turmoil. Under Gennette, Macy’s mainly expanded its online platform and moved away from shopping centers. Macy’s also fended off activist investors calling for the company to spin off its e-commerce business.
Macy’s is no longer the dominant force in American shopping as it was in the 20th century. The department store format has faded in favor of online shopping like big chain stores Goal (TGT)and low-cost clothing chains like TJ Maxx.
But Macy’s, known as the annual sponsor of New York City’s Thanksgiving Day parade and 4th of July fireworks, has outperformed from Kohl (KSS), Nordstrom (JWN) and other department store peers in recent years, while Sears, JCPenney and Neiman Marcus have filed for bankruptcy.
Gennette, one of the few openly gay chief executives in Corporate America, will be replaced next year by Bloomingdale CEO Tony Spring. (Macy’s owns Bloomingdale’s.)
Spring has been with Bloomingdale’s for 36 years. The chain achieved record sales last year and is considered the strongest part of Macy’s business.
The choice of Spring indicates that Macy’s sees its future in luxury retail and higher-income customers.
Department store icon
One of the biggest moves under Gennette was downsizing Macy’s.
For decades, Macy’s was a reliable anchor tenant for retailers and a draw for shoppers. But in 2020, Macy’s announced it would close 125 stores, about a fifth of its portfolio. The company withdrew from “lower” malls and focused on developing small, free-standing stores.
In January, Macy’s had 566 stores, up from 613 in 2019.
Macy’s also recovered from the impact of the pandemic better than many of its rivals.
The company temporarily closed all of its stores early in the pandemic in 2020, but recovered in 2021 and 2022 as shoppers spent money on new clothes and gifts.
The company’s sales are about what they were pre-pandemic, and Macy’s has avoided the stock piling that other apparel retailers suffered.
Still, the future of Macy’s is uncertain.
Shoppers have retreated to discretionary goods such as clothing and shifted their spending to paying for groceries and basic household necessities in the face of inflation. Macy’s expects sales to fall by up to 3% this year from a year ago.
“Thanks to Mr. Gennette, Macy’s is not dead or even circulating in the sewer,” GlobalData Retail analyst Neil Saunders said in a note to clients Wednesday. “However, it is still on a dangerous slide with weak long-term prospects.”
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