Macy's opens a Twin Cities outlet store as Herberger's closes theirs

Macy's has opened its first Backstage outlet store in Minnesota just as Herberger's is closing its only Minnesota outlet. And both are in Maplewood, the St. Paul suburb with a concentration of value stores.

Macy's Backstage opened softly March 16 to enthusiastic customers in Maplewood Mall, said store manager Nancy Dorle. "We've seen a significant increase in foot traffic," she said.

The grand opening is Saturday, with the first 200 guests in the store receiving a gift card worth $5 to $25. The store plans free balloons, a DJ, and a gift with purchase after the ribbon-cutting.

The new outlet center will not displace the Last Act clearance sections in the men's, women's, handbags and shoe departments. Those sections are still alive and well. And no departments were eliminated, either. Intimate apparel is now on the second floor, and women's dresses and suits are consolidated into the main apparel departments.

The 18,500-square-foot Backstage now takes over the first floor.

Shoppers unfamiliar with Backstage will find an outlet similar to T.J. Maxx and Marshalls. All items are purchased specifically for the outlet by a Macy's buying team that selects items that fit the outlet concept.

None of the merchandise comes from the full-line Macy's stock, but prices typically are discounted 50 percent or more from the suggested retail price.

"It complements the full-line store well," said Emily Workman, a Macy's spokeswoman. A plus-size area for women and juniors features sizes 1X to 3X, and a cosmetics department carries brands not found in the full-line store.

The outlet has an element of Zara and H&M, too. The store gets shipments daily, with many items meant to be a fast-fashion version of "new and now."

"We're about Easter, spring, weddings and graduations now," said Dorle.

There are 11 dressing rooms and one cashier area.

Macy's chose Maplewood because of the value-driven customers in the area. More Backstages are expected to be added to stores in Minnesota and Wisconsin this year, Workman said. Earlier this year, the company announced it would open an additional 100 Backstages in 2018.

It opened in 2014 with an unusual concept for an outlet store — 100 percent of its merchandise came from parent company Bon Ton's full-line stores.

The Herberger's clearance center is just one of 47 full-line and clearance stores Bon-Ton is closing all over the country this year.

With Backstage, Macy's is following an approach that works well for Nordstrom, T.J. Maxx and outlet malls — selling mostly items that were made specifically for the outlet and that never hung in a full-priced department store.

JOHN EWOLDT

The market was briefly abuzz Friday morning with a report from Fast Company that cited unnamed sources saying Target and Kroger have been in merger talks for months.

Kroger's shares spiked 7 percent before the markets opened on Friday on the initial report.

Fast Company said the two retailers first began conversations last summer that continued in the fall and are ongoing this year. The report noted the flurry of activity in the grocery space since Amazon's acquisition last year of Whole Foods.

It also noted that Target's grocery chief, Jeff Burt, was hired last year from Kroger.

Burt was brought on to help Target fix what has been an ongoing weakness, especially as chains such as Walmart, Aldi and Hy-Vee have been upping their grocery games.

In the past couple of years, Target has been working to improve its supply chain to offer fresher and more organic produce as well as to introduce more better-for-you products. It has been expanding its beer and wine selection, which has been showing positive results.

But while some analysts have been waiting for a big overhaul of the department, Cornell told the Star Tribune recently that the company is making more nuanced changes.

"It will be subtle changes," he said. "It may not be something we shout about, but we know the changes we're making in assortment and presentation and service. … They don't jump out at you, but we know what we've done and the guest responds well to it."

Target, which has historically been more conservative when it comes to acquisitions, began to do more in this space last year when it bought Grand Junction and Shipt.

Cornell had this to say on whether Target would make more deals this year:

"We look at opportunities every week. There's always opportunities in the market. If they help accelerate our strategy, if they complement the work that's in front of us, we'll certainly continue to look. But as we've shown, we're going to be very selective about where we invest."