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What's Wrong With Macy's? Second Quarter Profit Drops 77%

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According to the Chicago Sun-Times, Macy's has cut their yearly outlook after their second quarter profits dropped 77%. What's the big problem?

The merger with May has not gone well for Macy's, and they're having trouble integrating the Marshall Field's stores. From the Sun-Times:

Profits were hurt by higher-than-expected costs of integrating more than 400 former May Department Stores, including the Marshall Field's chain. Macy's bought the May Department Stores for $11 billion in August 2005.

But cost cuts helped shrink selling, general and administrative expenses.

Sales at the former Marshall Field's and other May stores continue to disappoint, but are closing the gap in performance with long-time Macy's stores, Chief Financial Officer Karen Hoguet said in a conference call with analysts.

The gap should close next year, but the converted Marshall Field's stores might take longer to gain acceptance, Hoguet said. Long-time Macy's stores were hurt by missteps in color and style in ready-to-wear clothing in the spring. Hoguet said Macy's executives believe they have the right fashions for fall, such as denim, wide-leg pants and novelty jackets and coats.

Are they really that shocked that the Marshall Field's faithful have stayed away from Macy's? Are wide-leg pants the answer?

Tell us: What's wrong with Macy's?

Macy's cuts outlook after profit falls 77 percent for the quarter [Chicago Sun-Times]
(Photo:Meghann Marco)

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Wide leg pants? Thank you :) I like baggier pants - they're way more comfortable. How anyone can stand the tighter pants is beyond me.

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what's wrong with 'em?


They're expensive. They have TERRIBLE customer service. Nobody really likes what they sell?

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You obviously haven't tried spandex. You put those on, you never want to wear anything else.

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@chimmike:

Exactly...they have the worst customer service around...If they sold cell phone service, they'd be Verizon's twin.

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Take menswear, for example. In my area, Macy's stocks only the bottom-of-the-mall-barrel crap (Calvin Klein, Izod, Geoffrey Beene, Nautica) that all comes from only one or two big companies. Everything is mainly the same with the very slightest differences. About one in four days, this stuff is on sale, say 30 to 50% off.

Two blocks down the road, TJ Maxx sells the exact same stuff at 50% every day of the week.

Four blocks down the road, Gabriel Brothers sells the exact same stuff (though the tags are sometimes cut out) at 75% every day of the week.

Why buy menswear at Macy's? They do not add enough value with their bland interior stylings and kind but poorly informed sales staff.

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What they did to the famous Walnut Room restaurant in the Chicago Marshall Field's was criminal.

I went there with a close friend last year, shortly before Thanksgiving. The service was absolutely abysmal. When the waiters' shifts changes, our table was taken off the list, so we didn't see our food until we rousted them out personally. Our *checks* took close to 20 minutes to bring to us, and only when we went looking for it personally -- again! All the while, the service staff is standing around at the front desk, chatting away.

To this day I am not sure if were targeted as being "not their kind" (we were in casual tourist dress) or they were just asses, but I'd never seen service that bad before -- at ANY restaurant.

If that's what they do to that landmark, I don't even want to know what the rest of the store is like.

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I have to admit to being a pretty big proponent of Macy's. I never buy anything at face value, but for clothes, there's always a sale and some of their in house brands are fine on quality. I agree with the comments that their customer service is bad. Being in New England, that is what I miss about Filenes. They definitely had some of the best customer service around.

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Macy's is having trouble because their Service is mediocre at best and their prices are high. When you pay that much for something, you expect high quality service. If you get 'Old Navy' treatment, you expect 'Old Navy' prices.


Actually, come to think of it, 'Old Navy' has better service usually. Wal-mart may be a better example...

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I will compare Macy's to Kaufmann's (the former May Co. store which I shopped at regularly). Macy's is too expensive. I regularly find the same merchandise at Lord & Taylor and it's actually cheaper there. Macy's does nothing to encourage me to shop there--they rarely have sales. I used to receive coupons from Kaufmann's on a weekly basis, so if I needed something, I went there to get it because there was always a sale. Macy's sends fliers to me every week, but there are rarely any coupons or sales, and when there are, the list of excluded brands is long. The Macy's in my area have stopped carrying less expensive clothing lines and now only sell more expensive designer lines. That may be trendy, but it's not for everyone. And in addition to all of that, the styles they carry are generally just not appealing. Most people I know are disappointed with Macy's.

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@chimmike: Their customer service was rated top 10 last year. You're obviously a tool

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@BoorRichard:

That's why it's worth spending a little more at Men's Warehouse when I need men's clothing (clearly, I'm not at the top level of men's clothes, but still). They're informed, they can color match, and I'll pay extra for competent service.

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Well let's see. The Field's family did a lot for Chicago philanthropy wise. Many of us grew up going to the State Street store to see the Xmas windows, maybe have a meal in the Walnut room. Then Federated Department Stores came in and changed it. I mean, yes, it's just name, but it was *our* name. It was Midwestern, not some snotty East Coast behemoth. I can't tell you how much we all snickered when Daley declared the State Street Store a historical building, so Federated can't grind down the Field's signs etched into the building.

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My spending at Macy's this year went down at least 80% from last year.

They used to be the place I could rely on to pick up nice, up-to-date clothes for work. Since they merged (with Foley's around here), the stores seem to have hired someone's great-aunt in Kansas to do the buying for the misses' section. The styles they carry now are frumpy, ugly, and generally unflattering.

The men's section isn't even worth a pass-through. Although if you like Dockers, boring packaged button-down shirts and ugly/cheap ties, you're in luck. (Not that their men's collections have ever been stellar...)

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Macys failed to understand that Marshall Fields was a tradition in the Chicago area. The store on State Street is historic and fabulous. One of a kind. Too bad the focus is on wide-leg pants and novelty coats instead of customer service. Marshall Fields didn't guess at what people wanted, they knew what people wanted because their culture was to know and serve their customers. Macys has pissed away generations of good will and customer loyalty, which cannot be bought. It's sad to watch.

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In the last few years around here, Hudson's has become Marshall Field's, which has become Macy's. That's poor branding if nothing else.

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I have to say I've been a huge macy*s fan since moving to LA from Seattle about 12 years ago. (And after having a Nordstrom's and a Nordstrom's Rack close by for so long, I was doubtful.)


However, I do have to say that this year our local macy*s has evolved into something completely different from what I'm accustomed to.


I've loved macy*s for their ULTRACHEAP sales. Their new stuff is always rather pricey and we exercise a lot of restraint in trying to hone in only on the clearance and sale racks and it pays off nicely. I've picked up some wonderful, classic styles for so little money over the years, but as I said, this year - and I assume it has something to do with all of their acquiring - they're really slipped both in the deals that can be had as well as in the layout and look of their store. We just went there a couple of weeks ago and everything had that half-finished look to it - it made me think of the perpetually screwed-up United terminals at LAX.


I hope they can turn it around because they really have been a great store for my family.

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The problem with Macy's is that they are WAY too expensive.


I went looking for a little white sweater to go over a sundress (so I wouldn't freeze indoors) and the only ones we found were on sale, but they were still over $40! For a little sweater! The friend who went with me said she could crochet something exactly like what were looking at for no more than $8. Instead we went to Penny's and found something just as good for $16

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I used to work at Marshall Field's, and I can tell you that the Field's brand loyalty is fierce; maybe more than any other department store chain I've seen. When Federated bought Field's, and then Macy's bought Federated, almost all the regular guests at my store were up in arms about it. Now that Frango mints (a ubiquitous chocolate mint that is synonymous with the Field's brand) is available at Macy's, you'd think the customers would be hapy about it? No, they're upset because "Macy's stole the Frangos from Field's". And this was all in a small Indiana store. I'm not surprised at all that the Chicago market, where Field's has been a city landmark since the middle of the 19th century, refused to go to Macy's once they changed.

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Yes, AWELFLE, but let's not forget that Frango's were originated at Seattle's late, lamented Frederick & Nelson's (a/k/a Fred and Nelly's).

Macys took over Filene's here in Burlington VT. Now it's a messy, disorganized, craptastic store.

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Living in Chicago I can tell you the store on State St. is DEAD compared to what it was when it was Marshall Fields. It's just not the same.

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where i am from macy's used to be hecht's department stores, and i miss it! macy's sales suck, and the clothing styles they carry, especially for young women around 20-25, are terrible. i still like the shoe department, but that's about all i'll buy there anymore.

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macy's is great. i used to think it was an overpriced clothing store but my wife takes me there and i always find high-quality t-shirts (the ones that are actually soft) for $7 or less. American Rag jeans for $25 sometimes.

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I would say your prices is the biggest problem.
Products should be either fashionable and pricey or WalMart-type and cheap. Macy's doesn't fall in either one of these categories.

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Went to Macy's just once and found a pair of $700 jeans on the clearance rack! Went back to work on Monday and my whole section had a good laugh! No more Macy's for me!

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Macy's used to be Kaufmann's here, and since they switched to Macy's we have not bought a single thing there because their prices are TOO EXPENSIVE!!! They used to have incredible deals, I bought an interview suit for 30-40$ there and it was beautiful and flattering! They used to have such awesome clothes and sales but now all they have is 90$ jeans. Shoe prices were also very good before they switched with an extensive selection. The store used to be packed with shoppers now it is all but dead. When they are located in a mall with all the hip stores such as abercrombie, hollister and hot topic no wonder they are suffering, the competition is just too stiff and their prices are just too high.

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The last time I was at Macy's I was asked six times if I would like to open an account. SIX TIMES! Once while I was in the dressing room after asking my boyfriend.

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I definitely agree with Protest - Hecht's was my favorite department store far and away. Now that it's Macy's I can never find any sales associates, their sales aren't worth the time (woo, 15% off? Whatev.) and the selection is utterly craptastic. Seriously, every time I go in I just see frumpy, cheap-looking (although still expensive), dated and unstylish clothing. Whoever is choosing their offerings is just horribly misguided.

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Macy's is expensive? Not on your life. In Chicago, Field's used to be a high end store. Macy's has downgraded most of the clothing brands and made it comparable to Penney's in my mind. We don't need anymore of that in Chicago. I work two blocks from the State Street store and used to buy lots of clothes, makeup, or just wander during lunch. I now go out of my way and walk 15 minutes further to buy simple things like mascara at Nordstroms even though Macy's carries the same stuff. And the clothes! Macy's private label brands are so cheap and ugly. Do they really think Chicago dresses like that? I'm sick of New Yorkers assuming that we don't know fashion in Chicago. I just read that Glamorama (great former Field's event) will have a country singer focus this year. Heeehaaawww Chicago. HELLO??? This is just ridiculous. I give up. My business has been and will continue to be with Nordstrom's and local boutiques.

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I don't know about the rest of Macy's but I do know that they should never have changed the name of Fields to Macy's. Being a native Chicagoan, we don't hate New York but we don't want to be told New York stuff is better then our stuff. Even though they didn't say it, there was a certain arrogance that Macy's was going to be a better store. We didn't want a better store, we wanted the store we wanted. Sometimes the customer is right.

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I'll tell you what's wrong, they're infrastructure is AWFUL. The buyers and planners do not work together, they throw money at every problem and they've got no long term outlook.


In short...that's the story as to why I took a job with LVMH as opposed to Federated (Macy's).


My fiancee was all, "but they're offering you more money" I was all "Yeah, but at the cost of a future"


They're going to be bought out by a private firm and then things might get turned around (that last part is spec)

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I don't get why they are buying up respected smaller names and then deep-sixing them. I think they ran into the same historic loyalty problem with the Strawbridge's name. Maybe they were selling the exact same stuff, but I always went to Strawbridge's and never Macy's. When the Strawbridge's became Macy's, I pretty much stuck to Sears and Boscov's.


I finally went to Macy's last weekend - to take advantage of the liquidation sale at the superfluous second Macy's that used to be a Strawbridge's. It will probably be the last time I go into a Macy's until the other one goes under :-)

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My friends and I have the same attitude about Macy's since they changed the Marshall Fields stores over. The only time we will enter the store is to walk through and keep warm on a cold winter day. We actively hope that every Federated executive connected with the decision loses his or her job and becomes a pariah in the retail world. Not that we feel strongly about it.

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The Macy's near me used to be Foley's stores. The first thing they did was get rid of mens big and tall. I can't shop there anymore. In fact, all the Macy's in the surrounding 3 malls near my home have no Men's big and tall. Why would I bother shopping there anymore if they're not going to cater to me?

I usually get Gift Cards for holidays to buy clothes, but I had to tell people to stop giving me Macy's cards because they're useless to me now.

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Macy's heavy-handed approach with Marshall Field's has turned off many people in the midwest. They swooped into Chicago, announced the name change, and when people protested, they essentially said, "hey, it's Macy's. We're from New York, therefore we're better and you're going to like it." Bzzzddtt.

Companies would *die* for the brand recognition and loyalty that Marshall Field's had...instead Macy's dumped it. It's obnoxious.

No, I'm not from Chicago, I'm from the Milwaukee area. We lost our Marshall Field's, too. One of my mother's fondest childhood memories was going to Chicago and going to the State Street Marshall Field's store. It's the same for a lot of people. It was an institution, and Macy's was stupid for changing it.

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As someone who spent part of my youth in Chicago, I totally echo the comments re: Marshall Fields and the State Street store. Every year before going back to school, Mom and I would have a special day where we would go shopping at Marshall Fields and then meet my Dad for lunch in the Walnut Room. It was great.

Did Macy's close the Walnut Room? I kind of hope so because I can't imagine what horrid changes they would have made.

Fortunately, I no longer live in Chicago, so I can keep my Marshall Fields memories intact without having to see Macy's sign over them.

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If you manage to find something you like, good luck finding a working price scanner. The next challenge is finding someone to ring up your purchase. Good luck with that too. It just becomes not worth it to waste your time there.

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A big part of it is loyalty to Marshall Field's. I loved Field's and almost always at least walked through the State St. store if I was anywhere near it. Even in the middle of summer, it reminded me of fun and cheery Christmastimes.

Another equally swaying force is what BOILERBOB mentioned. There was a sense that a big ole' New York store was telling Chicagoans that their store was better than ours.

But, nevertheless, I *have* gone into Macy's a few times, both downtown and at the Oakbrook Mall. Those places are a MESS! Doesn't anyone there tidy up? Things were randomly shoved on shelves or racks. At Oakbrook, the floor was sticky! Blech.

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@Melov: You can't namecall because someone's opinion differs from a (likely totally made up) statistic! I happen to agree that Macy's customer service generally stinks.


As for my personal reasons for staying away basically boil down to better/cheaper clothes elsewhere and still angry about them killing Burdines. I also find myself avoiding stores as of late, not sure why.


Last thing I bought there were 2 pairs of discounted Levis (which, surprisingly, is a brand that seems to have actually turned itself around!)

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Odd that many of the responses are similar to the complaints about the Gap in a post a few weeks ago: Too expensive, low/inconsistent quality, I used to love it, hit/miss customer service, disengrating brand cache, going for difficult middle market, etc. Also interesting is that those who do shop there will only shop the big sales (also like Gap and BR) which hurts the bottom line for these brands. Do I detect a pattern?

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I really don't shop there often due to the expense. I also prefer JC Penney's because it seems less cluttered in the clothing sections. And, they have better lighting. And, thier juniors' section doesn't have the fitting room door blinds facing the wrong way so the salespeople can see in and "make sure you aren't stealing anything". :P


To whoever said they have good customer service - who's counting? I've never been asked if I wanted any help, it's rather like Robinson's May used to be.

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I've sort of given up on department stores. I'm from Southern Cal and remember Buffum's (gone), Broadway (gone), Bullocks (gone), Bullock's Wilshire (gone), Robinsons (gone) and from my days in Texas I remember Sakowitz (gone).

Neiman Marcus really doesn't do it for me any more although I do occasionally hit Nordstrom. Generally I'll shop at two or three smaller men's stores where I get the service and selection I like. In effect I have a couple of personal shoppers - one in San Francisco and one in Long Beach.

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It's Macy's Karmic punishment for killing Field's, and I must say it is RICHLY DESERVED.

Locally the problem with Macy's is that the quality is no better than Sears or Penney's, but the price is twice as much and there are NO SALES ASSOCIATES in the entire store. Since all three are in the same mall, who would bother with Macy's even if we WEREN'T all pissed about them eating Field's?

Our other local midrange department store, which is a Bergner's (which is apparently the same as a Carson Pirie Scott), has better staffing, better service, similar prices, and better sales.

Honest to God, our Kohl's has better service and staffing than our Macy's. It's horrific.

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Macy's customer service varies wildly by region. In New York City and L.I. it BLOWS. The customer service in their flagship at 34th St is horrible, and that's the store that millions of tourists visit every year. Have you ever been to their Brooklyn Fulton Mall store? It's like something out of a post-apocalyptic zombie movie. It has been a mystery to me my whole life how Macy's is able to stay in business.

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I am in agreement with Boorrichard. Why buy it at Macy's when you can wait a few weeks and get it cheaper at TJ Maxx. I grew up with Macy's in NYC, and even then i liked S5A and Bloomies much better.

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@GirlCat: Yes, the Fulton Macy's is Zombieriffic. I don't know how it stays afloat, considering the community. The Kings Plaza one is almost as bad. BTW, do you remember A&S or Alexander's *sigh*

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The Stay-Pufft Marshmallow Man.
That is all I can think about as I watch Macy's, something safe and beloved from my childhood, the something that could never hurt me, gobble and destroy what little retail nobility is left in our world.


Way back when (in the late 80's and early 90's) there was no internet, no ebay, if you lived in the sticks, you bought what was offered in the sticks. Sears, Younkers and JCPenney. Those were the options.


To make it worse, my poor mother knew better. She had been dragged from New York to this Midwestern college town by love and children, but she never let us forget what she gave up for us. Only a few things made it bearable, the occasional decent bagels smuggled across the Mississippi river by visiting relatives, and the Macy's Thanksgiving Parade. She gathered us around and got lost for hours, and then, at the end, was Macy's.


It was WHERE the "Miracle on 34th Street" happened, where she bought her prom dress, where she bought her wedding dress. To hear the Mom and Nana talk, it was the be all and end all of stylish shopping.


Now the great name has been sold, and bought, and sold again. It has intentionally become a junk shop, forcing us to rip out coupons and paw through battered sale racks in hopes of finding something that will work for what I need. Most people don't even know that before it started chasing Wal-Mart down the retail ladder, Macy's was once a quality store.


The worst moment of all this was seeing them take down Marshall Fields. It was to my sister's children what Macy's was to us. The annual Christmas trip to see the windows, the place to buy the important event clothes…all that quality gobbled up and gone. I stood just inside the State Street store last month and almost cried- piles of junk on sale tables, the beautiful building staring down on what it had lost. And for what? A 77% drop in sales, the inevitable bankruptcy that will force the company to unload property to condo converters and close store after store? Is there any heart left in Macy's?

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@QuirkyRachel: You're exactly right. I've outright BOYCOTTED Macy's after ditching the Fields name. It was bad enough they bought it, but getting rid of the name was enough for me. I'm a ruthless consumer, and I love it.

For all those in agreement, I have a treat for you: [www.newathens.org]

That site used to sell that logo on a tshirt. I can't find how to buy them anymore. If anyone does, post it!

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@GirlCat: @AriellaFaerie: I am afraid to go in there because I value my brains, true story.

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My experiences at the Greater Cleveland (Ohio) Macy's conversions:


-The stores are all inconsistant.
-The brands are comparable to JC Penneys (A second tier store)
-The constant insisting that their generic store brands demand a premium price, when they are inferior (in quality) knockoffs to the brands they took away from us (When we had Kaufmann's, and May Company prior to...)
-The store staff has changed dramatically, from the midwestern feel of the people we once knew, to the pretentious feel of some effeminate men in our men's departments, in their pretentious overly black clothing, a la the SNL skit "Sprockets"
-Poor Advertisement
-Poor Layouts
-Jacking up the prices a day before a 15% off sale.


The list goes on and on... but really, do you need any more reasons? Macy's entry into Greater Cleveland just meant less selection of shops for me to buy from.


Macy's was never really a reasonable choice to purchase from for me.

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@Melov:


a tool? Because my own personal experience every time I've visited various Macy's stores is their employees are rude, hard to find, and don't know shit.


If I'm gonna spend my money somewhere, it's gonna be where I get customer service or where an employee can answer simple questions about the products they sell.