Hiroko Masuike/The New York Times
Macy’s is renovating its 111-year-old Herald Square store, in part to draw more luxury shoppers.
Nearly all of the iconic wooden escalators still clack up and down at the flagship Macy’s store in Manhattan, but customers entering the store during its $400 million makeover will find little else familiar — especially in the street level’s grand hall, studded with gleaming luxury goods showcases, high ceilings and shiny white marble floors.
Hiroko Masuike/The New York Times
Terry J. Lundgren, Macy’s chief, says the store offers greater opulence.
Perhaps best known outside New York as the setting for the movie “Miracle on 34th Street” and the Thanksgiving Day Parade, the department store is sprucing up its 111-year-old facade, opening bricked-up windows, laying 47,000 square feet of new marble and adding 300 dressing rooms.
A major upgrade — and a strategy for Macy’s as it tries, like other retailers, to capture a larger piece of the thriving luxury goods market — is the expansive great hall beckoning shoppers inward from Broadway, with a full wraparound mezzanine above the luxury handbag and cosmetics counters. All in all, once the four-year renovation is completed in 2015, Macy’s will have added 100,000 square feet of retail space, for a total of 1.2 million square feet.
Macy’s executives acknowledged that one major goal of the renovation was to try to generate sales growth in expanded areas.
“To continue to grow the brand, we needed to elevate the store experience,” said the store’s chief executive, Terry J. Lundgren, a towering figure in a pinstriped suit, as he meandered through the renovated ground floor recently. “That meant adding new brands and creating a luxury component that we didn’t have before.”
It is a critical time for big department stores nationally, as competition from online retailers and a sluggish economic recovery have crimped sales growth. Macy’s Inc., which also owns Bloomingdale’s, is expected to report earnings next week, after a disappointing second quarter. Then it reported earning $281 million, or 72 cents a share, short of the 78 cents a share that Wall Street had expected; it was the first time in more than six years that the company had missed analysts’ expectations.
The company’s plans to renovate the store in 2009 were scrapped, Mr. Lundgren said. “I traveled around the world, to Galleries Lafayette in Paris, Harrods and Selfridges in London and Takashimaya in Japan,” he said. “I knew there was more that we could do — we needed to elevate the architecture, the beauty and the efficiencies.”
Macy’s declined to provide a breakdown of how it was spending the $400 million meant for renovating its 11 sales floors.
But, said Paul Swinand, an equity analyst who covers Macy’s for Morningstar Investment Services, “they are expanding by 100,000 feet in prime Manhattan, so if you think about it, they are getting a pretty good deal.”
“Right now there isn’t a lot of space anywhere, and these city-center stores are typically in very grand buildings; anything you can do to enhance the brand and productivity is a positive for the company,” he said, adding, “certainly you don’t want to spend $400 million and then have a drop in sales.”
The entire main floor has been updated with shimmering new showcases and sections displaying top designer goods. Macy’s is “a tourist place,” Mr. Lundgren said, with roughly six million tourists a year making up 30 percent of its customers.
Louis Vuitton continues to anchor the ground level, with a renovated and expanded three-level shop. Macy’s has also struck deals with luxury brands like La Mer cosmetics, Jo Malone perfumes, Longchamps handbags and Burberry. Coach has opened a shop designed by the architect Rem Koolhaas.
“We are taking a grand old building that was a little dusty and that had been modified — sometimes a bit insensitively — over the years, and we did our homework, polished it off and have brought back the luster,” added Tom Herndon, Macy’s senior vice president for store design.
This article has been revised to reflect the following correction:
Correction: November 7, 2013
An article on the Square Feet pages on Wednesday about a $400 million renovation at Macy’s misidentified the frontage street of Stella 34, a restaurant in the department store. It faces Broadway, not Seventh Avenue.
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