I don't see much logic in the idea on my own, and the explanation hasn't added any. The folks running Saks haven't impressed me much of late; it will be recalled that the background of Mr. Baker et al is in real estate, and while their initial impression was positive -- or maybe "surprising" is the better word -- by not killing off Lord & Taylor, unfortunately that seems to have been the high point: there've since been a large number of acquisitions which were supposed to generate synergies, both in real estate and retail, but seem to have produced neither. At some point out-of-the-box thinking isn't enough: a person running a retailer needs to be able to actually sell stuff.
I'm not going to say this is the first step to turning Saks into the next Lord & Taylor, but....
My thoughts are:
1) Traditionally, they've taken over spots from other retailers -- they have an informal reputation as a "harbinger of death" for dying malls and while they no doubt have certain criteria, it's still different from someone like Kohl's who builds most of their stores; which is my roundabout way of saying if you're going to continue recycling real estate, broadening your criteria will give you a lot more to choose from.
2) The stores have a hard-to-define inventory, unlike, say, Macy's or Target which has X type of shirts from Y manufacturers in Z sizes; for the latter, pruning SKUs, seemingly, is quite straight forward: you cut back on odd sizes and lesser selling brands. BCF will have the same goal, but I think it will be harder to define beforehand what needs to be trimmed.
"...on top of similar commitments made in recent years" and yet we're still asking the question. I think that gives us the answer.
This has very much a "been there, done that" feel to it: every so often Walmart -- or ...well, anyone really -- announces some "made in America" marketing angle, and then reality intrudes: people want low prices too, or they want their products to have been made under idealized conditions, or whatever. Maybe something is different this time -- costs are lower or source reliability is more important or... -- but the evidence is still mostly anecdotal.
Many, if not most companies are dominated by sales people, and every other department -- logistics, facilities, finance, technology -- has to struggle to be seen as something other than a cost center. It's an unfortunate, indeed child-like perspective for management to have, but it is what it is.
So with that in mind, I would have to disagree with the idea of other "C"s becoming LESS important. Tech has just joined the list of EQUALLY important.
"Far from being a fluke..." Wait a minute: COVID is so disruptive we dare not even issue a forecast, but at the same time it apparently played played no part in last year's success(es)? Really?
I'll not fault Target -- or any of the other "essential" retailers -- for their performance(s), but one would have to be clueless to ignore the extraordinary conditions under which it existed. The real questions, I think, are: 1) will they hold onto the gains, and 2) did this just accelerate existing trends or fundamentally change the landscape?
For the first question, the answer is "some of them." They won't have the same market share they did when practically every other retailer's stores were closed -- realistically how could they? -- but it will still be higher than it was.
For the second question, I'm leaning more to the former, largely because of the worldwide nature of the pandemic. Though obviously certain business models -- e.g. online selling -- enjoyed an advantage, I don't think any particular company did (at least not in a way that wasn't also shared by their competitors).
I foresee a struggle between realism and the traditional optimism ... no, make that "boosterism," of real estate, with lessor's trying to look tough -- at least in public -- while having 911 on speed dial in private.
But eventually all but the most elite properties (and who knows how many there are now or even what they look like) will cave; they'll have to because there's too much property for conditions ... and it's not going to get better until equilibrium is reached.
At some point you realize it's neither the leader nor the crew, but the vessel: as we've said here on RW many, many, many times, the department store class of ships are dreadnoughts in an age of nuclear powered subs (expensive to operate, relatively slow and not easily maneuvered).
That's not to say there aren't many eternal question marks: the May merger -- hundreds of low performing stores -- and the move to scrap the Marshall Field's name -- perhaps the worst decision in retailing since Sewell Avery bunkered down Wards for a Depression that never came -- come to mind; but those were a generation ago. It's hard to say what recent management could have done, or more importantly, can do now to make much difference.
Quick question: has the "Law" that the number of times the word "exciting" is uttered is in inverse relation to something actually BEING exciting been named yet? If not....
It seems like there are two kinds of companies that perpetually tinker with the org chart: those that do something with this, and those who hope to (but don't). I'll put Macy's in the latter.
But enough negativity, let's look forward: sales last year were bad ... Great Depression level bad (no mystery why: Target et al's gain was Macy's et al 's loss); but that means this year will look pretty good (at least as long as we don't think about it much or compare it to two years ago ... or twenty). And maybe one or more of their "exciting" initiatives will pay off, in a big way. Put the two together, and they'll have something called "momentum."
Cuz we should all take our economic cues from a cosmetics company ... right?
And their history is more than a little revisionist: actually there was a steep -- albeit short -- depression first, England and Germany floundered throughout much of the decade, and of course the '20s gave way eventually to the '30s ... enough said.
But history seldom, if ever repeats itself. We have plenty of clues about the (many) challenges ahead without having to turn to naive comparisons.
Should we just focus on Covid? The implicit answer would seem to be "yes," since they were open prior (to the pandemic), but to me at least it seems illogical to be frequently asking how we can improve food safety, and yet ignore what's probably one of the weakest links.
Translation: I suspect many of them will never reopen, and those that do will probably be quite different (much more prepackaged, less self-serve); which in many ways is too bad, since salad/hot bars were a relatively inexpensive way for stores to differentiate themselves.
This seems to be a continuation of the "V-shaped recovery" theme, and IMHO the poll results reflect hope over facts: (1) most businesses have been open for months, and (2) large segments of the country -- at both the individual and industry level -- experienced large, sometimes catastrophic, income loss; it's not magically coming back.
Businesses that have been closed completely -- theaters, bars, fine dining -- may indeed see an "at last!" moment when they reopen, but I'm more cautious of its extent: few people are going to go dinner or the movies 35 nights in a row just because they missed that many times over the past year.
So everything makes an extra trip to the "consolidation facility"? And then the "reusable tote" gets picked up again (by another special trip, unlike it would in the regular waste pickup)? Perhaps this results in some efficiencies, but it's not self-evident ... so it doesn't move the "Compelling" meter much.
It's rivals? Given that's its department store rivals -- BonTon, Sears, JCP -- have either gone out of business, seem to be going out of business or pose a perpetual question mark, it would be "relatively stronger" just by being alive. So the place to look is non-department store competitors, and I don't think the picture is particularly flattering. What Macy's has to decide -- always has to decide really, since it's a constant issue -- is between the same old, same old of pruning store counts and reinventing the wheel, and doing something truly dramatic -- closing or spinning off half its stores, reviving legacy nameplates, etc.
I suspect authenticity and transparency don't scale very well (certainly if the former includes the owner having an active involvement in each sale). Integrity - or the lack of same, really - is harder to excuse, other than the sad realization that cheaters prosper -- at least in the short run.