Macy’s Just Signed a Major Deal with Apple

September 8, 2016, 9:03 PM UTC
Shoppers Ahead Of Consumer Comfort Figures
Pedestrians and shoppers pass in front of a Macy's Inc. store in New York, U.S., on Monday, July 18, 2016. The Bloomberg Consumer Comfort Index, a survey which measures attitudes about the economy, is scheduled to be released on August 11. Photographer: David Williams/Bloomberg via Getty Images
David Williams — Bloomberg via Getty Images

Macy’s is turning to another iconic brand for help with its big sales drops: Apple.

President and CEO-designate Jeff Gennette told Wall Street analysts on Thursday that Macy’s signed a deal with Apple (AAPL) to open an Apple store within its 1 million square-foot flagship at Herald Square in New York. Not only is Macy’s the first department store to host one of the tech giant’s emporia, but it will also be able to sell the Apple Watch at more than 180 stores in time for the Thanksgiving to Christmas rush.

“It will be in all of our top buildings for the holiday season,” said Gennette, who will take the reins in early 2017 from longtime CEO Terry Lundgren.

Apple announced a new set of products this week, including the second generation of the Apple Watch. Macy’s will sell the Apple Watch Series 1 and 2 product, as well as the Apple Watch Nike+, iPhone, iPad, MacBook and its accessories.

Gennette also hinted that Macy’s could expand the number of Starbucks (SBUX) stores, which currently number 49 locations. Though Gennette did not give specifics, he did say Macy’s is looking at what could easily be ramped up and stores would add more food options to generate shopper traffic. He listed Starbucks as an example of a business Macy’s could theoretically scale.

Starbucks itself, which operates cafés at hundreds of Target stores, is launching a line of higher end cafés.


The deal with Apple comes as Macy’s looks to halt one of the worst spells in its modern history: Comparable sales have fallen for six straight quarters. And last month, Macy’s announced it would close 100 more stores in early 2017, on top of the 40 it closed earlier this year. That will leave it with fewer than 650 locations.

In a previous interview with Fortune, Gennette made clear that outside retailers would be front and center in the store’s sales strategy. Introducing The Finish Line (FINL) stores to Macy’s locations a few years ago has been a big hit for the retailer in part because the retailer hadn’t been “credible in the athletic footwear arena.” And Best Buy (BY) boutiques have helped Macy’s offering in electronics, a tough category for the retailer. (Best Buy also operates Apple boutiques at some of its stores.) Other such partnerships include Lids and Sunglass Hut, which has made Macy’s an eyewear powerhouse.

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