While Macy’s Shrinks, Bluemercury Is Up for Retail Expansion
Bluemercury

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There’s got to be plenty of conflicting emotions in the C-suite of Macy’s right now regarding the Bluemercury retail expansion. While the legacy merchant recently announced plans to shutter 150 underperforming stores by 2026, its freestanding beauty acquisition Bluemercury is poised for major retail expansion. Not only is Bluemercury, which Macy’s snapped up in 2015 for $210M, expecting to add 30 new stores it’s also renovating 30 existing doors. Macy’s Inc. CEO Tony Spring shared his Bold New Chapter plans for the brand at Shoptalk 2024 in a high-energy, strategic-focused presentation. He is at the helm of refreshing the Macy’s brand, amplifying Bluemercury, and strengthening luxury.

Currently, there are roughly 180 Bluemercury stores in the U.S., with big chunks in California, New York and New Jersey — as in 35, 21 and 17 stores, respectively. But in keeping with its “neighborhood store” mission of blanketing affluent areas, there are still plenty of cities, and even states, that don’t have a single Bluemercury store.

So why is the boutique-vibe Bluemercury working when what people largely associate Macy’s with – its big, splashy, multi-floor stores — isn’t?  As Spring shared, Macy’s is in for a transformation. A full-scale analysis of this complicated chess game of retail expansion and contraction will reveal itself as Spring rolls out his plans, but Bluemercury’s upward trajectory largely has to do with two key factors: footprint and focus of product offering.

The Smaller the Better? Seems to Be the Case with Retail Right Now

Let’s start with size. In a company earnings call timed to coincide with its official store-shuffling announcement setting forth “A Bold New Chapter,” Spring said the stores it was shuttering represented roughly 25 percent of Macy’s Inc.’s total square footage but just 10 percent of its sales in fiscal 2023.

Thus, the path forward is two-fold: shut the behemoth Macy’s doors that aren’t cutting it and open 30 small-format Macy’s stores over the next two years, along with 15 pint-size Bloomie’s stores.

How small is small? Evidently, the shrunken version of Macy’s is one-fifth the size of the traditional version. The Bloomie’s stores range between 22,000 and 50,000 square feet, as compared to the 150,000 to 200,000 square-foot traditional Bloomingdale’s doors.

At an average of 2,600 square feet, freestanding Bluemercury stores are a fraction of the size of even the smaller-format Macy’s and Bloomie’s. Still, that’s roomy enough for its edited range of prestige skincare, makeup, fragrance, and beauty devices, along with dedicated spa areas offering facials and brow styling.

Your Friendly (But Elevated!) Neighborhood Beauty Retailer  

Founded by husband-and-wife team Barry and Marla Beck in 1999 as a digital-only play, Bluemercury quickly segued to retail, opening its first store in its native Georgetown that same year. Another Bluemercury store opened nearby shortly thereafter, establishing an early and lasting operating principle for the retailer: once you’ve identified a target-rich environment, go for it and don’t let the fear of “cannibalization” stop you from plunking one store within walking distance of another.

Case in point: in Westport, Connecticut, there are two Bluemercury stores directly across the street from each other. Dubbed Bluemercury Westport and Bluemercury Westport 2, they’re located at 62 Main Street and 57 Main Street, respectively.

Currently, there are roughly 180 Bluemercury stores in the U.S., with big chunks in California, New York and New Jersey — as in 35, 21 and 17 stores, respectively. But in keeping with its “neighborhood store” mission of blanketing affluent areas, there are still plenty of cities, and even states, that don’t have a single Bluemercury store.

Presumably, as it expands Bluemercury’s door count and homes in on its mission of retail expansion, Macy’s Inc. will be exploring uncharted territories. It might be high time for South Dakota and Maine to get their mitts on their first-ever Bluemercury.

Prestige-Only with a Spa Twist: What Sets Bluemercury Apart

It’s kind of my job to give the quick 411 on each of the top three freestanding beauty retailers in the U.S., and how they differ from each other, so here goes: Sephora is prestige-only and offers no beauty services. Ulta offers both prestige and mass and several stores also have an in-house hair salon. Bluemercury is prestige-only and offers, as mentioned earlier, facials and brow tweaks.

To go a little deeper, I would further break them out as such:

  • Sephora, because it’s owned by LVMH, has long had a much more European product offering than either Ulta or Bluemercury. It also completely kills it in fragrance and makeup.
  • Because of its high/low mix of prestige and mass, Ulta is extremely approachable for the average consumer. It also has a much greater emphasis on hair, from liquid product and tools to its on-site salons.
  • Bluemercury, in my opinion, is the most elevated, edited, and intentional of the three big beauty retailers. It tells a story. It has an opinion. It goes out of its way to hire and train beauty nerds who are utterly fixated on ingredients and product performance.

And speaking of product performance, Bluemercury has its own skincare range, M-61, that’s genuinely successful. Its star product, M-61 PowerGlow Peel, is so popular that, per the company, one sells every eight seconds.

Not that Bluemercury overly promotes its own house brands. (It also has a makeup range, Lune+Aster, which was one of the very first in the clean and vegan categories.) Instead, in its stores and on its website, it champions best-of-breed offerings from every hot brand, from 111Skin and Barbara Sturm to U Beauty and Vacation. It even has a leading-edge platform it calls the Cache, which throws a spotlight on promising new entries like Le Domaine, Brad Pitt’s shockingly well-crafted unisex skincare range.

Bluemercury gets it. It knows successful beauty retailing is about glamour, quality, and the fun of discovery. And when that’s all served up in a chic little store located right in your neighborhood a stone’s throw from your favorite coffee shop, that’s even better. 

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