Apple Is Coming To Macy’s

Store-within-a-store has been one of the few consistently performing innovations on offer in department store retail of late. JCPenney’s recent turnaround has been greatly aided by its strategic and expanding partnership with Sephora.

Macy’s, always willing to experiment with a new thing, is embracing the concept and is working with a rather eye-catching partner to giver the mini-store a chance.

That attention-grabbing teammate is Apple. CEO-in-waiting Jeff Gennette told analysts at Goldman Sachs’ annual retail conference on Thursday (Sept. 8) that Macy’s will open an Apple store at its Herald Square flagship in New York City.

This will make Macy’s the first department store chain to house Apple as a tenant. Macy’s will also sell the Apple Watch at about 180 of its retail locations during the holiday season. Gennette also confirmed for analysts that Macy’s will be expanding its partnership with Starbucks past the 49 coffee concessions in stores now. Macy’s incoming CEO also hinted at the possibility of opening up some restaurant locations that serve beer or wine for patrons looking to take some of the edge off shopping.

Apple’s expansion into a mini-store is not entirely unheard of — there are already several Apple locations housed within Best Buys nationwide — but this is the first department store push. For Macy’s, the move comes as the store is culling its store count dramatically — 100 stores are expected to close in the near future, mostly in the Midwest.

The question analysts are asking is whether the move represents a smart choice by Macy’s to boost traffic or a desperation play by Apple looking to fend off the iPhone’s first extended slump in sales.

“A slick move by Macy’s or did @Apple just jump the shark?” retail expert Doug Stephens asked via Twitter last week.

Macy’s has long publicaly indicated intentions to aggressively lease space across its 800-plus department stores to other specialty retailers as it looks to extend and customize its product lineup.