Macy’s Terry Lundgren to step down as CEO next year

Macy’s Inc (M.N) said Terry Lundgren will step down as CEO next year and be succeeded by former chief merchandising officer Jeff Gennette as the department store operator tries to revive sales hit by stiff competition from online and off-price retailers.

Lundgren would transition to executive chairman.

He oversaw the purchase of May Department Stores Company, which doubled the size of Macy’s footprint.

Macy’s shares on Thursday rose as high as $34.17 after the announcement. In 2004, Gennette was appointed executive vice president and director of stores at Macy’s Central in Atlanta. Gennette, 55, previously served as the company’s chief merchandising officer and ran Macy’s West in San Francisco. In May, it slashed its full-year profit and revenue outlook for the year after weak results in the spring and during the holiday season.

Lundgren’s tenure at Macy’s is a distinguished one, and includes almost doubling topline sales, acquiring the May Department Stores Company, and consolidating an array of regional department banners under the Macy’s banner.

Rivals like Kohl’s and J.C. Penney are looking for new growth opportunities.

In response, the company has announced a raft of measures, including shutting stores, opening off-price stores and starting a Chinese joint venture with Alibaba Group Holding Ltd (BABA.N) to open an online store. He began his retail career in 1983 as an executive trainee at Macy’s West. He held positions of increasing responsibilities, including vice president and division merchandise manager for men’s collection and senior vice president and general merchandise manager for men’s and children’s.

The previous year has been more turbulent with five consecutive quarters of sales declines as the entire department store sector struggles with changing consumer shopping habits and a defection from shopping malls.

Macy’s 2015 web sales grew 15.0% to $6.21 billion compared with $5.40 billion in 2014, Top500Guide.com data shows.