MARIA: WELCOME BACK.
IT'S BEEN A BIG MONTH FOR SOME
BRICK AND MORTAR RETAILERS.
WALMART HAD THEIR BEST U.S.
PROFIT FORECAST AS WELL.
LIKE AMAZON AND WHILE TAX REFORM
AND EMPLOYMENT GROWTH HAS HELPED
STIMULATE CONSUMER SPENDING, HOW
RETAILERS ADJUST TO THE DIGITAL
ECONOMY COULD DETERMINE THEIR
SURVIVAL.
JOINING ME TO TALK RETAIL AND
THE ECONOMY IS TERRY LUNDGREN,
THE FORMER EXECUTIVE CHAIRMAN
AND CEO OF MACY'S.
IT IS GREAT TO SEE YOU.
>> GREAT TO SEE YOU.
MARIA: THANK YOU SO MUCH FOR
REALLY WHAT'S GOING ON.
CONGRATULATIONS ON AN INCREDIBLE
RUN AT MACY'S.
I WANT TO TALK ABOUT THAT AS
WELL.
HOW WOULD YOU CHARACTERIZE WHERE
WE ARE NOW IN TERMS OF RETAIL?
>> WE ARE IN A REALLY GOOD
PLACE.
THERE'S BEEN A LOT OF ACTIVITY
THAT'S TAKEN PLACE, PARTICULARLY
OVER THE LAST FEW YEARS AS
RETAILERS HAD TO PIVOT ONCE MORE
TO THE CHANGING CONSUMER
ENVIRONMENT.
RIGHT NOW, MARIA, CONSUMPTION IS
STRONG.
TAKEN PLACE ARE STARTING TO GET
SOME TRACTION.
YOU ARE SEEING REALLY STRONG
RESULTS, NOT JUST FROM MACY'S,
TARGET, WALMART, KOHL'S,
NORDSTROM, BROAD SPECTRUM OF
RETAILERS DOING WELL.
I THINK THAT'S A REALLY GOOD
SIGN FOR FALL.
WE GOT THE CONSUMER BACK.
YOU REIMAGINED MACY'S A NUMBER
OF TIMES.
YOU BASICALLY CHANGED THE LOOK
YOU WERE, FROM 2003 TO 2017, THE
CHAIRMAN AND CEO OF MACY'S.
WHAT A RUN.
YOU HAVE SEEN A LOT.
I WAS STILL IN THE SADDLE FOR A
IT'S BEEN AN INCREDIBLE TENURE.
CONGRATULATIONS.
TELL US HOW YOU'VE CHANGED, YOUR
LEADERSHIP CHANGED MACY'S OVER
THESE YEARS AND WHAT DID GET YOU
CHANGING AND ADAPTING TO A NEW
ECONOMY?
HAVE SEEN THIS, THE CHANGES THAT
TAKE PLACE CONSTANTLY.
EVERY FOUR OR FIVE YEARS,
ADJUST AND REACT.
IT'S NOT A SMALL PIVOT VERY
OFTEN.
IT'S OFTEN A VERY LARGE ONE.
WE ARE USED TO THIS AND YOU CAN
NEVER GET COMFORTABLE.
WE HAD 10, 11, 12, 13, 2014,
UNBELIEVABLE, AVERAGE GROWTH OF
$1 BILLION A YEAR AT MACY'S AND
BLOOMINGDALE'S AND THEN HAD
EARNINGS RATIO JUST KEPT GOING
THE CONSUMER CHANGES AND YOU
HAVE TO PIVOT ONCE AGAIN.
I THINK ALL RETAILERS FACE THESE
CHANGES THAT OCCUR LARGELY BY
THE CONSUMER AND YOU GOT TO GET
IN FRONT OF IT.
YOU CAN NEVER REST.
HOW IS THE CONSUMER GOING TO ACT
NEXT.
I THINK MANY OF THESE COMPANIES
THAT ARE DOING WELL NOW DIDN'T
START CHANGING THEIR STRATEGY
MONTHS, FOR YEARS, FOR EVEN A
CONSUMER IN THE STORE, THE
CONSUMER ONLINE, AND RECOGNIZE
SHE DOESN'T SHOP IN ONE OR THE
OTHER.
IT'S ALL CONNECTED TO THIS
OMNICHANNEL EXPERIENCE TODAY.
KNOW --
>> YEAH, OFF-PRICE.
LOT OF PEOPLE DON'T RECOGNIZE
IS IT MOVING TO AMAZON, SURE,
THEY DID A GREAT JOB.
ONLINE COMPONENT.
MACY'S IS THE FOURTH LARGEST
INTERNET COMPANY IN AMERICA.
THEY WERE VERY STRONG THERE,
STILL ARE.
BUT THE OFF-PRICE CHANNEL WAS
STARTING TO ATTRACT THIS
MILLENIAL CONSUMER WHO REPLACED
APPAREL FOR WORK AND THE LIKE,
WE CREATE OUR OWN OFF-PRICE
FREE-STANDING STORES AND THEY
WERE FINE.
MARIA: YOUR STOCK HAS DONE SO
WELL, UP MORE THAN 50% YEAR TO
DATE.
LAST YEAR YOU HAD A BIG SELLOFF,
TRADING AT SEVEN TIMES EARNINGS?
WHAT DO YOU THINK HAPPENED LAST
WEEK WITH THAT SELLOFF?
>> I THINK THAT INDIVIDUALS WERE
SAYING HEY, THIS HAS BEEN A
OUT.
SO I THINK THEY CAN ALWAYS BUY
BACK IN ON THE DIP WHICH I'M
SURE THEY'VE DONE.
THAT DAY IN JUST A FEW DAYS.
JUST BASED ON THE FUNDAMENTALS.
EARNINGS WERE VERY POSITIVE.
PEOPLE DIDN'T QUITE GET THE
SHIFT AND I TALKED JEFF THROUGH
THAT, THAT IT DIDN'T MATTER HOW
SHIFT A BIG EVENT, THEY HAD A
FRIENDS AND FAMILY EVENT A YEAR
AGO, THIS YEAR WAS IN QUARTER
ONE, LAST YEAR WAS IN QUARTER
TWO SO OBVIOUSLY THAT'S A BIG
SHIFT.
IT GOES BACK TO SHOULD WE
REPORT, YOU KNOW, IN A
SEMI-ANNUAL WAY OR QUARTERLY
WAY.
NEVER HAVE HAD THIS UP AND DOWN
BECAUSE IT WOULD HAVE BEEN MORE
GRADUAL.
TERM.
>> I NEVER LIKED THE SHORT TERM
AND I NEVER LIKED MANAGING TO A
IT DOES FRANKLY INFLUENCE