Publicly traded department store company Macy’s has put $15 million into Chinese e-commerce company VIPStore Co., and announced that it will sell private brand merchandise through a Macy’s section on VIPStore Co.’s site, omei.com. In addition to omei.com, VIPStore operates jiapin.com, a flash sales site.
Macy’s, Inc. M +0.52% today announced it will sell an assortment of its highly regarded private brand merchandise directly to consumers in China through a Macy’s section on omei.com, a newly established China-based online retailer of in-season luxury and fashion brands operated by VIPStore Co., Ltd.
In addition, Macy’s, Inc. has made an equity investment of $15 million in VIPStore Co., a Chinese e-commerce firm and parent company of omei.com. Macy’s, Inc. joins other venture capital providers, including Intel Capital, in acquiring a minority stake in the company. In addition to omei.com, VIPStore operates jiapin.com, an established flash sales site.
“Our relationship with VIPStore will allow us to gain additional experience in the fast-growing Chinese market, and to better understand how consumers across China interact with Macy’s and the products we sell,” said Terry J. Lundgren, chairman, president and chief executive officer of Macy’s, Inc. “We know that Macy’s is very well known and regarded in China through international tourism, globally broadcast events such as the Macy’s Thanksgiving Day Parade, and movies such as Miracle on 34th Street. But we still have a great deal to learn about the shopping patterns and merchandise preferences of consumers in China’s very diverse and rapidly emerging consumer marketplace.
“We continue to believe there is significant long-term opportunity internationally for both Macy’s and Bloomingdale’s. But we need to be certain that our future decisions in this regard are based on fact and experience,” Lundgren said. “Omei.com is an online retailer that appeals to style- and trend-conscious consumers. We believe it is a good match for our current interests in selling to Chinese consumers and understanding the market.”
“Macy’s is one of the world’s most respected retailers with 153 years of experience. We are delighted to enter into a relationship with them,” said Allen Yang, chief executive officer of VIPStore. “This is an opportunity for us to share learnings with a world-class retailer and continue to deliver a first class customer experience to the members of omei.com and jiapin.com, which serve 2.5 million members and continue to grow.”
The Macy’s section on omei.com is expected to begin selling an assortment of I.N.C. women’s and men’s fashions in spring 2013. Other Macy’s private brands are planned to roll out in the following seasons. Moreover, visitors to the Macy’s section of omei.com can link to the full merchandise assortment available to Chinese customers on macys.com. Orders placed through omei.com will be filled locally through that company’s facilities in China. Orders placed by Chinese customers on macys.com will be fulfilled through the United States, as they are today.
Macys.com first started selling online in China and more than 100 other nations in 2011 through a collaboration with FiftyOne, an international e-commerce provider.
Macy’s, Inc., with corporate offices in Cincinnati and New York, is one of the nation’s premier retailers, with fiscal 2011 sales of $26.4 billion. The company operates about 840 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy’s and Bloomingdale’s, as well as the macys.com and bloomingdales.com websites. The company also operates eight Bloomingdale’s Outlet stores.
All statements in this press release that are not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Macy’s management and are subject to significant risks and uncertainties. Actual results could differ materially from those expressed in or implied by the forward-looking statements contained in this release because of a variety of factors, including conditions to, or changes in the timing of, proposed transactions, prevailing interest rates, changes in expected synergies, cost savings and non-recurring charges, competitive pressures from specialty stores, general merchandise stores, manufacturers’ outlets, off-price and discount stores, new and established forms of home shopping (including the Internet, mail-order catalogs and television) and general consumer spending levels, including the impact of the availability and level of consumer debt, the effect of weather and other factors identified in documents filed by the company with the Securities and Exchange Commission.