Macy’s expects private label products to account for 25% of annual sales by 2025 with four of its brands – I.N.C. International Concepts, Character Club, Alfani and Style & Co. – representing $1 billion in revenue each, Chief Merchandising Officer Patti Ongman said Wednesday during an investor conference. Macy’s posted annual sales of $24.9 billion in the year ended February 2019 (updated earnings are expected later this month).

While Macy’s carries a broad range of licensed and non-licensed products – it is adding 100 new vendors this spring – private label has proved profitable as the chain moves to bolster its finances amid a broad reorganization, including the closing of offices in Atlanta, San Francisco and Cincinnati and shutting 16 of the 36 Story experiential  in-store locations it opened last April. Among the largest categories is fashion jewelry, where private label is accounts for 45% of sales.

National Brand Focus

Macy’s also will sharpen focus on its top national brands, company executives said. The chain’s Top 10 national brands (Calvin Klein, Clinique, Coach, Chanel, Michael Kors, Estee Lauder, Lancome, Mac, Ralph Lauren and Tommy Hilfiger) will increase to 30% of Macy’s annual revenue by 2022, up from the current 25%, Ongman said.

At the same time, Macy’s ecommerce sales have been increasing 24% annually and are expected to hit $6 billion in the fiscal year ending later this month, with Macys.com accounting for $5 billion, Chief Product and Digital Revenue Officer Jill Ramsey said.

New Store Format

Meanwhile, Macy’s plans to expand the new Market By Macy’s freestanding 20,000-sq.-ft. store format, the first of which will open Thursday in Dallas. Additional locations are planned for Washington, DC and Atlanta, said CEO Jeffrey Gennette. Story Founder Rachel xx, who sold the experiential concept to Macy’s in 2018, is overseeing the Market By Macy’s freestanding format.

Macy’s also is will seek zoning approval in New York this year for a 1.5 million-sq—ft. office tower atop its flagship store on Herald Square, Real Estate EVP Douglas Sesler said.