Vanessa Delacruz, a resident of New York’s Washington Heights neighborhood, was at Macy’s Herald Square flagship in Manhattan on Monday with her 13-year-old daughter. Delacruz noticed a change upon entering the store’s main entrance after checking out the iconic holiday window displays.
“It’s much brighter than it used to be,” Delacruz, who visits the landmark store about every two months, said in an interview. “There’s different brands. ... I see more luxury perfumes. ... That's a positive,” she said. The high school science teacher plans to return before Christmas to pick up a fragrance for herself, an annual tradition.
After giant Snoopy and Buzz Lightyear balloons float past the store Thursday for the Macy's Thanksgiving Day parade, more visitors will be greeted — on Black Friday, the unofficial start of the holiday shopping season — with the famed emporium’s expanded beauty floor.
The 123-year-old Herald Square location recently completed its first phase of renovations ahead of the retail industry’s biggest selling period. Instead of the familiar Coach and Michael Kors handbag sections — which have been relocated to the opposite side of the blocklong building — shoppers now find Dior and Chanel luxury beauty counters flanking the main walkway, followed by other prestigious brands such as Prada, Armani, Gucci, Valentino, Burberry and Hermès.
The shift is part of Macy’s bid to remodel some stores while closing others and tapping categories such as luxury beauty as a growth driver. It's all part of CEO Tony Spring’s “Bold New Chapter" strategy to drive traffic and lift sales.
Macy's, like other department store operators, have faced slowing sales amid increased online spending and changing consumer tastes. Meanwhile, off-price retailers such as T.J. Maxx parent TJX have attracted bargain-hunting shoppers, industry analysts have said. Specialty retailers and fashion brands’ own stores have also eaten into demand on the brick-and-mortar front.
Macy’s beauty expansion appears to have paid some dividends. On Monday, for instance, a stream of shoppers entering the store stopped at many of the new luxury counters and checked out makeup and skincare items and perfumes.
New York-based Macy’s, which also owns luxury retailer Bloomingdale's and the Bluemercury skincare and makeup shops, in September reported its strongest comparable-store sales growth in 12 quarters, both companywide and under its namesake brand, driven in part by demand for luxury beauty. Spring also said remodeled Macy’s stores outperformed the average across the chain.
Macy’s didn’t immediately respond to a CoStar News request for comment.
Macy’s pivot to grow luxury beauty sales comes as the category has outpaced overall retail sales, different studies have shown. And at a time when Americans are increasingly cautious about their discretionary spending.
A NielsenIQ study released in October found global beauty sales rose 10% in the past 12 months as consumers are making more shopping trips, spending more per visit and buying more units despite “economic pressures.” Luxury beauty, the smallest segment of the industry, is expected to increase at a faster pace than lower-priced categories, according to a separate McKinsey study published in September 2024.
“Beauty’s resilience is undeniable,” NielsenIQ said.
“Beauty is a key category for Macy’s given the high profitability of many products and they draw women and girls into the store,” David Swartz, a Morningstar equity analyst, told CoStar News in an email. “Macy’s has to fight back against competitors like Ulta and Sephora, which have drawn shoppers away from department stores.”
Meanwhile, the revamp of Macy’s New York flagship comes as the Herald Square area’s retail rebound has lagged behind many other Manhattan retail corridors, leasing data has shown. For instance, a number of retail spaces displayed “for lease” signs just across from Macy’s on 34th Street.
Other efforts are underway to drive more foot traffic to the area during the holiday season. The 34th Street Partnership, the area’s business improvement group, is hosting a two-story Christmas carousel just a block south of Macy’s at 33rd Street and Broadway. On Monday, more than three dozen people, both children and adults, were waiting to take a ride.