Thursday, February 29, 2024

Macy’s Insider Spring to Replace Turnaround CEO Gennette Next Year

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Macy’s Inc chief executive officer Jeff Gennette will retire next year after four decades with the U.S. department store chain, the company said on Wednesday and named insider Tony Spring as his successor.

Spring, who has been with Macy’s for 36 years and heads its upscale Bloomingdale’s unit, is being elevated to ensure a smooth transition, the company said.

The leadership change comes as Macy’s and other department stores battle excess stock, forcing them to spend more on promotions and offer steeper discounts.

Gennette, 61, stepped into the top role in 2017 and has been credited for driving Macy’s digital expansion at a time when sales at department stores were taking a hit from rising online competition.

He had rejected a push by activist investor Jana Partners last year to spin off the online unit, saying Macy’s would be more profitable without a separation.

During the pandemic, Gennette expedited shipments and ordered products in advance, helping Macy’s overcome supply-chain hurdles that were hampering business for several retailers.

Macy’s said as CEO-designate, Spring, 58, would also lead its digital and merchandising teams, while overseeing Bloomingdale’s and beauty division Bluemercury.

In his new role, Spring will face the challenge of cutting expenses on promotions to boost margins after Macy’s earlier this month forecasted annual profit largely above expectations, with Gennette calling promotions as “competitive but measured”.

CFRA Research analyst Zachary Warring said Spring knows the day-to-day operations at Macy’s and would provide a smooth transition at a company that is operating well in a slowing industry.

Meanwhile, Macy’s also folded into the role of finance chief Adrian Mitchell the responsibilities of chief operating officer.

“Gennette leaves the company with a proven team that understands all the dynamics, strategy and is well-positioned to take the business to the next tier,” said David Bassuk, global leader of the retail practice at consultancy firm AlixPartners.

Macy’s shares were down about 1 percent in early trading.

By Ananya Mariam Rajesh; Editors Rashmi Aich and Arun Koyyur

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