Hedgeye Retail Sector Head Brian McGough has some quick thoughts on this recent Macy's story in Women's Wear Daily.
- "Bloomingdale’s is back on the expansion path, with a 115,000-square-foot unit in the Glendale Galleria in Los Angeles set to open Friday."
- "The Glendale site advances Bloomingdale’s strategy for opening scaled-down department stores and for trading up. It also marks the retailer’s first department store opening in three years."
Takeaway: We're not a fan of Macy's (M) by a long shot. But a massive redeeming factor that always makes us double check our thesis is the fact that it owns Bloomies. It's beyond debate that it is one of the best retailers in the apparel/accessories business. That said, it's not big enough to offset our view that Macy's Inc is nearing an ungrowable level of sales/square foot, margins are near peak, capital intensity is increasing, and expectations are high.
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