Profitability & Turnaround Cases
Macy's Case Study
05:00
Macy's Department Store Turnaround
JM
"Good morning! I'm Jennifer Martinez, a Partner in our Retail Practice. Today we'll be discussing Macy's, one of America's largest department store chains. They've engaged us to help develop a turnaround strategy. Let me give you some context..."
Company Overview
Annual Revenue
$24.4B
↓ 5.2% YoY
Store Count
721
↓ 125 stores in 3 years
E-commerce Share
35%
↑ from 24% in 2020
Operating Margin
3.2%
vs 8.1% industry avg
Key Challenges
- Declining foot traffic in physical stores (down 18% YoY)
- High operational costs relative to pure-play e-commerce competitors
- Aging customer base (average age: 52 years)
- Inventory turnover issues leading to heavy markdowns
- Competition from both discount retailers and luxury department stores
JM
"The CEO has asked us to develop a comprehensive turnaround strategy. How would you approach structuring this problem?"
Select Your Framework:
Profitability Tree
Focus on revenue growth and cost optimization across channels
3C's Framework
Analyze Company, Customers, and Competition dynamics
Digital Transformation
Emphasize omnichannel integration and digital capabilities