We compared shopping at TJ Maxx and the new kind of store Macy's launched to compete, and the winner was clear (M)

In a call with investors on Wednesday,
Macy's CEO Jeff Gennette said the retailer will have rolled out this concept to 120 stores by the end of 2018. He had previously said it would be added to 100 stores.
"This has been a good story for us," he said, adding that early adopters of the Backstage model — stores that added it in 2016 and 2017 — have seen positive sales growth.
We compared the shopping experience at Macy's Backstage and

Macy's wants in on the off-price boom.

America's biggest department-store chain is doubling down on its off-price concept, Macy's Backstage. In February, the retailer announced it would be rolling out the Backstage concept to 100 of its stores this year. On Wednesday, during an earnings call with investors, Macy's CEO Jeff Gennette updated that number to 120 stores.

"This has been a good story for us," he said. "We are satisfied with our results ... it's clearly a strategy that is resonating with customers."

Gennette said the company is closely monitoring the 40 stores that added Backstage sections in 2016 and 2017 and has seen positive growth there.

Macy's isn't alone in wanting to tap into the off-price model. Nordstrom has a similar concept, called Nordstrom Rack, that similarly takes inspiration from off-price stores like TJ Maxx and Ross Stores.

It makes sense that department stores would want to emulate an off-price model. Same-store sales numbers have been strong at off-price stores while many department stores have suffered in recent years. But department stores have one major disadvantage while operating in this space. Their off-price stores have to co-exist with their full-price stores, which also offer discounted products, potentially leading to brand confusion for customers and vendors.

tructural advantage over department stores since they have a large vendor base that has been built up over decades. Some of the products sold at TJ Maxx are made specifically for the store by certain brands.

Macy's Backstage has a separate buying team and sells a mix of products from new and existing vendors, both from the current and the last season. A spokesperson for Macy's confirmed that Backstage also sells overstock from its other full-price stores but said this makes up a limited amount of its inventory.

We decided to put the two stores to the test. Here's the verdict from a trip to visit both Macy's Backstage and TJ Maxx in June:

Our first stop was at a Macy's Backstage store in Queens Place Mall, New York.

Though this is a standalone Macy's Backstage store, there is a traditional Macy's store in the same mall.

We were greeted by makeshift tables with deals on Father's Day gifts at the front of the store.

We headed to the beauty section first. It was instantly apparent that this store doesn't stock only well-known brands, as there was a wide mix of lesser-known labels.

The store, overall, stocked more inventory on each item than we expected.

There were other areas that were devoted to products from one brand. Though the products were more random than you might find in your local pharmacy, there were great deals on items that would be appropriate for the current season.

When Macy's announced it would be rolling out Backstage sections to its existing stores in 2016, CFO Karen Hoguet assured investors that the new store model wouldn't cannibalize sales from its full-priced stores, as it has a separate buying team and different vendors.

It is hard to distinguish the difference between Backstage and a typical Macy's in some areas of the store, however.

We came across several Michael Kors, DKNY, Nine West, and Elie Tahari handbags, all of which are also sold at Macy's, though they may be different styles.

A spokesperson for Macy's confirmed that some of the products at Macy's Backstage are overstock from its full-price stores.

The store was laid out in a very similar way to other off-price chains like TJ Maxx. Macy's has also copied discounters by rolling out self-service models in its shoe departments.

Parts of the store were chaotic ...

... and it was clear that the focus here is on the bargain hunt rather than the actual shopping experience.

The homeware selection was impressive considering the store's fairly small size.

In a call with investors in May, Gennette said that menswear was one of the best-performing categories for Backstage. Despite this, it occupied a small space in the store.

There was a ton of clothing in the clearance section here ...

... and it was clear that some of this inventory had been around for a while.

The women's section was a bargain-hunting frenzy. However, Macy's made some effort to split the clothing by price and by theme ...

... even if some of the themes seemed fairly random.

While womenswear was stuffed full of inventory, other areas of the store were bare.

Ultimately, the store doesn't need to spend much time on the presentation provided the bargains are there.

Next, we headed to TJ Maxx in Manhattan, New York. Menswear and luggage were at the entrance to the store. We instantly spotted some recognizable brands such as Samsonite and Nautica.

Seasonal clothing was put front and center.

We spotted dozens of well-known brands.

There were deals at TJ Maxx on high-end labels that you would be more likely to find in a traditional Macy's store than in its Backstage concept. This pack of shirts cost $19.99.

We spotted a pack of five similar-looking shirts at Macys.com. They were being sold for $59.50 but are currently on sale for $43.99.

Some areas of the store were easier to shop.

But on the whole, it was pretty chaotic and lived up to the bargain-hunt experience.

The clearance section was sprawling.

This location was considerably larger than Macy's Backstage, which meant there was more room for homeware and furniture.

We found more popular brands here.

The shoes were appropriate for the season but felt less fashionable than the selection at Macy's Backstage, which had a wide mix of designer labels.

Both men's and women's wear included a section devoted to "Premium Designers," where trendy brands such as Theory and Vince had their own mini-sections.

We spotted dozens of Michael Kors, Ralph Lauren, and Calvin Klein products around the store.

These companies have all said they are looking to scale back from the off-price channel to improve their brand image, but that didn't hold true at this location.

The beauty section at TJ Maxx had a better mix of well-known brands.

More expensive items were boxed up in plastic to prevent shoplifting.

Our verdict: TJ Maxx was the clear winner. The assortment was more impressive, and there was a wide mix of fashionable brands and designers.

While Macy's Backstage offered similar deals and prices, the brands didn't seem to be as stylish overall. The company has said that these outlet stores stock different products from its full-priced stores, but in some cases, it is simply discounted old inventory from its full-priced stores.

We compared shopping at TJ Maxx and the new kind of store Macy's launched to compete, and the winner was clear (M)

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