mazon’s brilliance stems from their non-retail business: fmr. Macy’s CEO

18
1


MARIA: WE ARE BACK WITH FORMER MACY’S CEO AND CHAIRMAN TERRY LUNDGREN. YOU HAVE MADE SOME COMMENTS IN THE PAST ABOUT BRICK AND MORTAR STILL NEEDING TO GET SMALLER, IN TERMS OF CAPACITY, REAL ESTATE. YOU THINK, WHERE ARE WE IN THAT?>>WE ARE A LONG WAY FROM GETTING THE SUPPLY AND DEMAND BACK IN LINE. MARIA: TOO MUCH CAPACITY?>>TOO MUCH CAPACITY. PHYSICAL SPACE, THERE’S TOO MUCH INVENTORY IN THE SYSTEM AND THAT THE ONLY WAY TO GET RID OF IT IS MARK IT DOWN. THAT BECOMES AN OFF-PRICE ISSUE. MACY’S TOOK THE POSITION A COUPLE YEARS AGO WHILE I WAS THERE TO REDUCE 20% OF OUR STORES. POSITIVE. WE GOT RID OF ALL THE BAD STORES A LONG TIME AGO, OVER TIME, BUT THIS WAS A BIG DECISION. BUT WE KNEW THAT JUST WATCHING THE CURVE THAT THE STORES WERE YOU’RE NOT GOING TO BE PROUD OF THOSE STORES. IF YOU’RE NOT PROUD OF THOSE STORES, YOU WON’T BE ABLE TO KEEP THE SELLING TEAM THAT’S SO VITAL AND SO IMPORTANT TO THE CONSUMER IN THOSE STORES. YOU KNOW, WE HAVE TO GET IN FRONT OF IT AND RATIONALIZE THE IT WAS THE RIGHT MOVE. MARIA: LET’S TALK DEMAND. DEMAND HAS BEEN GOOD. BACK TO SCHOOL, HOW DO YOU CHARACTERIZE IT?>>VERY GOOD, SO FAR FROM REPORTS THAT I HAVE SEEN, BACK TO SCHOOL IS VERY POSITIVE. THAT’S GENERALLY A GOOD INDICATION FOR HOLIDAY SALES. WAS TEN YEARS AGO. BUT WHEN IT WAS MUCH MORE OF A DIRECT CORRELATION. BUT HAVING SAID THAT, YOU DEFINITELY WANT TO FEEL LIKE YOU’VE GOT MOMENTUM GOING IN BACK TO SCHOOL AS YOU ARE BUYING FOR YOUR HOLIDAY SEASON. MARIA: DOES THE BACK TO SCHOOL GIVE YOU AN INDICATION OF WHAT IS THE HOLIDAYS, CHRISTMAS?>>YES. IT DOES. AS I SAY, IT’S NOT AS, YOU KNOW, WAS. IT’S DEFINITELY A POSITIVE. BECAUSE THAT GETS OUR BUYERS SKITTISH ABOUT BUYING FOR THE HOLIDAY SEASON. I THINK WHAT YOU ARE SEEING QUARTER. MARIA: YOU GOT A 4.1% GDP FOR WE ARE EXPECTING 4.3% FOR THE THIRD QUARTER. TWO STRAIGHT QUARTERS OF 4% GROWTH POSSIBLE. IS THIS SUSTAINABLE?>>I THINK SO. MARIA: THE WAY THE CONSUMER FEELS TO YOU TODAY, YOU THINK THAT’S SUSTAINABLE?>>YEAH. CONSUMERS IS THE RIGHT WORD, RIGHT QUESTION, BECAUSE 70% OF GDP GROWTH IS DRIVEN BY CONSUMPTION. SO WE JUST NEED TO MAKE SURE NOW, SIX MONTHS FROM NOW, NINE MONTHS FROM NOW. ALL OF THESE INDICATIONS OF CONFIDENCE THAT ARE THERE TODAY NEED TO REMAIN — MARIA: HOW SENSITIVE YOU THINK THE CONSUMER WILL BE OF HIGHER INTEREST RATES? WE HEARD FROM POWELL ON FRIDAY, THEY HAD THE JACKSON HOLE MEETING. WE KNOW THE FED WILL PROBABLY RAISE RATES IN SEPTEMBER. DO YOU THINK THAT A STEADY SORT OF SLOW BUT STEADY MOVE IN RATES IMPACTS, CHANGES IT FOR THE THE BASE. WE ARE AT 2% INTEREST RATE. IT’S NOT LIKE WE ARE AT 8% GOING TO 9%. WE ARE AT 2% INTEREST RATE. WE ARE AT RECORD LOWS. I THINK FROM THE BASE WHERE WE BEGIN, THIS IS MUCH LESS OF AN THE INCREASES THAT THE FED HAS IN STORE, WHATEVER THEY MAY BE. WHAT THEY’LL DO BUT THAT’S WHAT THEY’VE SIGNALED. I THINK IF THEY’RE AS MODEST AS THEY’RE AS MODEST AS THAT, THE ECONOMY CAN CLEARLY HANDLE IT. MARIA: ONE OF THE THINGS THAT HAPPENED ON YOUR WATCH, UNDER YOUR TENURE, IS THE ENTRANCE OF AMAZON.>>YES. DIDN’T IT? TELL ME HOW YOU DEALT WITH THIS NEW SMALLER ENTRANT IN THE BUSINESS, WHAT YOU DID TO CHANGE TO GET MACY’S AS STRONG AS YOU COULD.>>SO THE GOOD NEWS WAS FOR MACY’S, MACY’S BEGAN THEIR MACY’S.COM WEBSITE IN THE LATE TURN INTO AN ONLINE BUSINESS. BY 1999 AND 2000, WHEN ALL OF THE DOT-GONE ERA — MARIA: DOT-GONE.>>MANY COMPANIES THESE PEOPLE HAVE FORGOTTEN ABOUT THAT WERE RIDING HIGH AT 50 OR 80 OR 100 MULTIPLES, THERE WAS REALLY NO MULTIPLES BECAUSE THEY WEREN’T MAKING ANY MONEY.>>RIGHT. THEY GOT WIPED OUT IN ’99, 2000, WHICH WAS UNFORTUNATE FOR MANY BUT IT WAS THE RIGHT THING BECAUSE YOU BEGAN TO HAVE TO HAVE A BUSINESS MODEL THAT COULD ACTUALLY PRODUCE EARNINGS FOR SHAREHOLDERS OVER TIME. SO WHEN THAT HAPPENED AND EVERYTHING SORTED ITSELF OUT IN THE ONLINE WORLD, MACY’S WAS ALREADY IN POSITION TO STAY WITH IT. AMAZON OBVIOUSLY DID SOME VERY, VERY GOOD THINGS. I THINK THE BRILLIANCE OF AMAZON IS THEIR NON-RETAIL BUSINESS. THEIR CLOUD SERVICES, THEIR DISTRIBUTION, THEIR LOGISTICS. THEY ARE DOING UNBELIEVABLE IN ALL THESE PLACES WHICH FRANKLY ALL THESE PLACES WHICH FRANKL THAT IS FAR LESS PROFITABLE FOR THEM THAN THESE OTHER BUSINESSES. I THINK THEY ARE ACTUALLY QUITE BRILLIANT IN THIS REGARD.

18 COMMENTS

  1. It's a damn good thing Tr_mp cut Jeff Bezo's taxes massively. Can you believe he was only able to afford 2 or 3 islands a year? That's criminal!

  2. Actually Amazon's success is a result of its connections to the military industrial complex. Bezos's employment record is proof. Huge contracts from the pentagon. Bezos investing in private space launches. Airlines pricing thier customers out of theier luggage to give Amazon a free ride. Government subsidies to the worlds richest man? Amazon is a milestone in the deepstates process of moving government affairs into the private sector to circumvent government supervision and turn 'decision making' into just another rich mans business.

  3. "[A]mazon's brilliance stems from [its] non-retail business: fmr. Macy's CEO"

    Replace the plural possessive "their" with the singular possessive "its" pronoun. Amazon, the company brand name, is singular. If you had referenced the employees/ divisions/ departments/ etc. of Amazon, then the pronoun would be plural possessive. However, you did not.

  4. Online and retail both have their pros and cons. One con for online is worrying about mail theft which has happened to me and then there's the hassle of returns.

  5. To make it at amazon you have to run and every minute your controlled by a scanner it's a slave hard labor fear type environment

  6. Jeff Bezos and Elon Musk are the enemies of Capitalism. They are destroying it the only way it CAN be destroyed–from within.

LEAVE A REPLY

Please enter your comment!
Please enter your name here