Macy's Dips Toe in China Market Via Online Deal


Macy's Inc will start selling some items from its private-brand collection directly to shoppers in China through a deal with a new online retailer that will allow it to gauge its long-term prospects there.

The department store chain said on Wednesday it will have a Macy's section on, a new China based e-commerce site operated by VIPStore Co Ltd.

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Macy's said it has also invested $15 million for a minority stake in VIPstore. Other investors include Intel Capital, the venture capital arm of Intel Corp.

The Macy's section on should start selling some items in the retailer's I.N.C. private label collection, aimed at young fashion-conscious shoppers, next spring.

The move is part of efforts by Macy's to take advantage of the popularity of its namesake stores and its upscale chain Bloomingdale's with international shoppers.

Macy's Chief Executive Terry Lundgren said in a statement that there is "significant long-term opportunity internationally" for the two chains.

Lundgren told Reuters in a recent interview that online initiatives were a way for the chain to try out overseas markets before committing to opening stores and facing well-established incumbents.

"That's a very different decision than us building a bricks and mortar store, which is permanent, which is expensive and a bit of the bet. I think it is a way to test the waters of interest in various countries," Lundgren said.

Shoppers in a number of countries, including China, have been able to buy on since last year.

Macy's does not operate any namesake stores outside the United States, but in 2010, opened a Bloomingdale's in Dubai under a license agreement with Al Tayer Insignia.

Orders made on by shoppers in China, and elsewhere will still be filled through the United States. Orders made through will be filled by that company's facilities in China.

Macy's online sales rose 39.6 percent last year, while comparable sales rose 5.3 percent, outperforming rivals J.C. Penney Co Inc and Kohl's Corp. Macy's internet sales make up about 7 percent of total sales. (Editing by Bernadette Baum)

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