Macy's (M) CEO Terry Lundgren said he's "encouraged" by the level of buying activity at the company's Herald Square store in New York City Friday.
The day after Thanksgiving in the U.S. is nicknamed Black Friday because it's the day when many retailers become profitable for the year. Macy's Chairman and Chief Executive Officer Lundgren told DailyFinance that Macy's sales were strong Friday because of the number of people he saw in the store walking around with purchases.
"Based on the fact that we had 5,000 people outside of our door at 5 a.m. this morning when we first opened up," at the company's Herald Square location, Lundgren said, "I'm pretty encouraged by that. The store continues to be full with lots of people carrying shopping bags."
While electronics items, such as big screen TVs and laptop computers, sell well and draw media attention at stores like Best Buy (BBY) and Walmart (WMT), Macy's customers are there to buy "well-know brands at great prices," Lundgren said. As part of its strategy to lure more customers, the retailer uses celebrities such as Queen Latifah and Martha Stewart to help Macy's sell perfume and household items.
Black Friday "sets the tone for the holiday season," Lundgren said. The Saturday before Christmas is the biggest shopping day of the year, he said, and the day after Christmas is also popular. Black Friday kicks off the holiday shopping season because shopping volume "skyrockets and it really starts to set the tone for the next 30 days," he said.
Macy's same-store sales were down and the retailer lost $35 million for the quarter that ended on Oct. 31. Sales have improved each month in 2009, Lundgren said in Friday's interview. "It's getting better and better and closer and closer to even each month," he said. "Our hope is that momentum continues into this really important fourth quarter." While Black Friday is looked at as the beginning of the holiday shopping season, Lundgren said, "November and December are the critical months," for Macy's.
Anthony Massucci is a senior writer and columnist for DailyFinance. You may follow him on Twitter at hianthony.
Learn the most important step in structuring an investment portfolio.View Course »