Department stores have been a core fixture of retail since Le Bon Marché opened in Paris back in 1852. But with the rise of discount retailers and e-commerce, these one-stop shop giants have struggled to maintain their market share.
Macy’s is no exception.
The 165-year-old retailer had some good news for investors earlier this month when it released its Q4 FY2025 earnings, reporting comparable sales up 1.8% year-over-year. But that encouraging tidbit was largely overshadowed by the fact that Macy’s net sales for the quarter were down 1.7% to $7.6 billion, marking 15 straight quarters of declines.
Despite the disappointing results, Macy’s isn’t waving the white flag just yet. Instead, executives are doubling down on the company’s most high-performing segment: luxury retail.
Macy’s is betting on Bloomingdales
During the Macy’s Inc. (M) Q4 FY2025 earnings call, CEO Tony Spring told investors that Bloomingdale’s had been the shining star of the company’s portfolio.
With net sales up by 8.5% and comparable sales up 9.9% in Q4, the high-end department store outperformed every other brand in the company’s portfolio by a wide margin. That remains true when looking at the fiscal year as a whole.
“In 2025, Bloomingdale’s achieved 7.4% comparable sales growth, representing a 490 basis point improvement versus last year and a 1,030-point improvement on a two-year basis,” Spring told investors.
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The success of the luxury department store can largely be attributed to Macy’s newly implemented “Bold New Chapter” strategy.
“[At Bloomingdale’s] we have a clear emphasis on discovery, newness, and connection with the premium contemporary to luxury customer,” Spring said. “Over the past year, we have raised the bar on curation. At the same time, we’ve deepened brand partnerships and further invested in experiences. This approach is resonating.”
“I am confident in our ability to further expand our position as a leading modern luxury shopping destination,” he continued.
Spring isn’t speaking hypothetically about those expansion plans, either. Later in the call, he told investors, “We are continuing to fund from both a capital and from a SG&A standpoint, the growth potential of Bloomingdale’s. It’s important to the overall architecture of Macy’s, Inc.’s go-forward business. I feel strong about the opportunity for Bloomingdale’s.”
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Bloomingdale’s is benefiting from Saks’ bankruptcy
Strategy isn’t the only thing at play in Bloomingdale’s success.
Saks Fifth Avenue, a major competitor of Bloomingdale’s, filed for Chapter 11 bankruptcy in January 2026, TheStreet’s Kirk O’Neil reported. As the company closes stores, many of its customers are looking for new places to shop and its vendors are looking for other retailers to carry their products. Bloomingdale’s has proven to be the perfect solution.
“The vendor community has rallied around Bloomingdale’s like never before,” Spring told investors on the call. “The disruption in the marketplace only gives more fuel to the fire.”
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Following Saks’ bankruptcy, “Bloomingdale’s has a great opportunity and they should ride it like there is no tomorrow because they are never going to get a gift like this again,” Michael Gould, former Bloomingdale’s chairman and CEO told the Wall Street Journal. “This is their moment.”
Over the last several months, as Saks has struggled financially and fallen behind on its bills, a number of brands have either restarted partnerships with Bloomingdale’s or started selling wares there for the first time. These brands include:
- Burberry
- Christian Louboutin
- Acne Studios
- Erdem
- Casablanca
- Willy Chavarria
Could there be new Bloomingdale’s locations in 2026?
Loyal Macy’s customers will be happy to hear that the company is considering opening new Bloomingdale’s locations in 2026.
Macy’s Inc. Chief Financial Officer and Chief Operating Officer Tom Edwards told investors that the company raised its capital expenditures to $800 million for FY2026 in part “because we think there’s a significant growth opportunity [for Bloomingdale’s], both organically and as we look at opening, potentially some stores.”
“With stores in just 14 of the top 50 designated U.S. markets, there is significant room for expansion of small format Bloomingdale’s and outlets, and we are methodically evaluating all opportunities,” Edwards said. “I am confident in our ability to further expand our position as a leading modern luxury shopping destination.”
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