Department Stores Move Upmarket as Luxury Struggles
The upmarket push is showing up at department stores, where the objective is to get customers to spend more without making the jump into luxury. Macy’s CEO Tony Spring described that effort during the retailer’s second-quarter conference call last week after an analyst asked about the runway for “premiumizing” its brand mix. “I think we […] The post Department Stores Move Upmarket as Luxury…
Department stores are shifting their focus to a more upscale customer base, aiming to increase spending without moving into the luxury segment. Macy’s CEO Tony Spring discussed this strategy during a recent conference call, stating there is potential to further enhance the company’s average unit retail (AUR). Spring explained that the company would continue to improve its product assortment, focusing on higher-quality items such as genuine leather and brands with higher price points.
AUR for Macy’s rose by 9% in the latest quarter, and the company reported an 1.1% increase in comparable sales. Bloomingdale’s also saw an 11.3% rise in comparable sales. Dillard’s, on the other hand, reported a 1% increase in comparable sales, with growth driven by categories like ladies’ accessories and lingerie, home and furniture, and a moderate increase in men’s apparel and accessories.
However, the luxury market is facing challenges, as evidenced by the decline in Gucci's revenue by 5% on a comparable basis in the first half of 2026. Overall, department stores are exploring various strategies to boost sales, with their credit card businesses playing a significant role in capturing more spending from customers.
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