The department store chain announced Tuesday that it plans to spend about $400 million over the next four years to expand and overhaul its storied flagship location at Herald Square in Manhattan. The makeover will affect every floor and virtually every department from shoes to luxury goods.
The renovations will begin in early spring 2012 and continue in phases through the fall of 2015. It says it will add about 100,000 square feet of selling space for a total of 1.2 million square feet by opening up space currently used for stock and offices. The store currently has a total square footage of 2.2 million square feet.
"The excitement, size and scale of this remodel reinforces our conviction that Macy's Herald Square is and will remain a retail store in a class by itself," Terry J. Lundgren, Macy's chairman, president and chief executive, said in a statement. "It is our company's most productive store, and experience shows that improvements in this location consistently result in higher customer traffic and sales volume."
As part of the renovations, Macy's will be creating the world's largest shoe department, featuring as many as 300,000 pairs of shoes on any one day, and infuse technology into the shopping experience that would range from interactive store directories to a new mobile app to guide customers as they shop. The flagship will have 22 restaurants and foodservice stations throughout the store that will accommodate seating for about 1,000 customers, an increase of 40 percent. The roster includes a new restaurant on the sixth floor that will provide views of the Empire State Building.
The renovations, the most dramatic since the 1970s, come as Macy's has been outperforming its peers like J.C. Penney as its strategy for tailoring merchandise for local markets has helped it to overcome an overall sluggishness in the economy. The company finished what it called its most successful second quarter and spring season in more than a decade, and that streak has continued into the fall. After a successful back-to-school season, the company said last month that it expects third-quarter revenue growth in stores open at least one year to be at the high end of its previous guidance of 4 percent to 4.5 percent. Macy's, along with other major retailers, is expected to report sales figures Thursday for October, the last month of its fiscal quarter.
Macy's said Tuesday the flagship store will remain open and operating during the construction. By fall 2015, the company says it plans to add about 800 new positions to the store's existing year-round workforce of about 4,600 people Macy's Inc. operates more than 800 stores under its namesake brand and 41 Bloomingdale's locations.
Macy's shares fell 53 cents, or 1.7 percent, to $30 in morning trading.