Following the lead of Lord & Taylor and Bloomingdale's, Macy's Inc. announced this week that its flagship 34th Street store will undergo a $400 million renovation, beginning this spring and lasting through the fall of 2015. The massive project, which includes upgrades of nearly every department, will create 1,600 construction jobs and add 800 new positions to the store's existing 4,600-employee fleet.
“Herald Square is our company's most productive store and experience shows that improvements in this location consistently result in higher customer traffic and sales volume,” Terry Lundgren, CEO of the $25 billion Macy's, said in a statement, noting that the costly renovation represents an investment in the future of the flagship and in New York City itself.
The revamped store will feature 22 restaurants and food stations, including a second-floor coffee, wine and chocolate bar. Even Macy's legendary exterior is getting restored to its historic look.
Rumors of a large-scale renovation for the 850-unit chain have been circulating in the retail community for nearly two years.
“The store is very classic looking, but also somewhat antiquated,” said Kenneth Stumphauzer, a retail analyst at Sterne Agee & Leach Inc. “It was probably due for a renovation.”
While the 850-unit chain has never disclosed what percent of annual sales the Herald Square location represents, it is estimated it could be between 4% and 6%. Much of the upgrade is focusing on areas where Macy's has had success, such as footwear.
Macy's is not alone in its renovations—it's just a bit behind. As recently as last fall, several major stores including Lord & Taylor, Bloomingdale's and Saks Fifth Avenue spent millions on renovation projects. Lord & Taylor's upgrade of its Fifth Avenue flagship, completed last October, cost between $20 million and $25 million.
Crain's New York Business
November 4, 2011
