Macy's renews procurement consulting contract with GEP

Macy’s Inc. – which includes the Macy’s, Bloomingdale’s, and Bluemercury retail brands – has renewed its procurement software and consulting services contract with GEP.

The relationship, which began in January 2020, has been extended in a new multiyear agreement. Clark, NJ-based GEP will continue to support Macy’s in driving procurement-based cost savings via spend analysis, sourcing, tail spend management, and contract remediation in multiple categories.

GEP provides proprietary supply chain and procurement software, as well as related consulting and managed services, to Fortune 500 and Global 2000 companies worldwide. The firm has more than 5,000 employees.

Macy’s – like other legacy department store retailers – has been under intense pressure to cut costs, streamline operations, and drive e-commerce strategies amid declining profitability. The company’s Polaris strategy, announced in February 2020, aims to stabilize profitability through optimizing store portfolios, resetting cost base, and accelerating digital growth.

The program includes investing in technology improvements, merchandising strategies, and store upgrades.

The New York-headquartered retailer had approximately 867 stores under its various brands in 2019; it had cut down its footprint to 510 stores as of October 29, 2022.

The firm is experimenting with smaller format, off-mall stores – opening eight such locations in 2022.

Macy’s earlier this month announced four store closures, with all locations inside malls.

In 2021, Macy’s activist investor Jana Partners was pressuring the company to spin off its more profitable e-commerce business. The retailer hired AlixPartners to analyze its business structure, ultimately rejecting the spinoff in February 2022 and Jana Partners divesting most of its shares.