Macy's Terry Lundgren will step down as CEO in the first quarter of 2017, as part of a plan to revamp Macy's business and improve sales. Bobbi Rebell reports.
A transition of power at troubled department store operator Macy's. CEO Terry Lundgren will move into the role of executive chairman in the first quarter of 2017. His replacement will be an insider - current president, Jeff Gennette. Retail analyst Mary Epner says she has some concerns about picking an insider to replace Lundgren. (SOUNDBITE) MARY EPNER, PRINCIPAL, MARY EPNER RETAIL ANALYSIS (ENGLISH) SAYING: "He will have to make some really tough decisions on how to reallocate dollars very quickly, get in some trending categories. They have been notably late on some trends in the past couple of years, so, it remains to be seen." Shares of the company lost more than half their value in the past year, but were up on the announcement. Although sales have nearly doubled during Lundgren's 13-year tenure, the retailer has recently been hit with falling apparel sales. The strong dollar has also discouraged tourist spending. Add to that heavy competition from off-price retailers, like T.J. Maxx and online heavy-weight Amazon. Bridget Weishaar of Morningstar says the problem isn't leadership, it's the new retail reality. (SOUNDBITE) BRIDGET WEISHAAR, MORNINGSTAR, (ENGLISH) SAYING: "You know, Terry Lundgren has been an excellent star of Macy's for over a decade now. But, if you look at over that decade plus, a lot has changed. E-commerce has really risen in popularity among consumers. He also have a lot of growth in off-price retailers the space. So, you know, having a fresh perspective, and having some new blood in the home isn't a bad thing. It might invigorate the company." Macy's is making other strategic changes, including closing stores, opening off-price outlets, and starting a Chinese joint venture with Alibaba. It could also consider new ways to monetize its heavy real estate assets.