Macy’s announced it will close 100 stores yesterday, but you have to dig deep into the press release to find out. Here’s a news flash: doubletalk in corporate releases fools no one. Bad news smells no better when you swaddle it corporate blather.
The bullshit begins with the title:
Macy’s, Inc. Outlines Moves to Drive Profitable Growth and Enhance Shareholder Value
This, of course, could mean anything. But reporters aren’t idiots — they can read 600 words in to find the actual news. So look at the headlines they chose to write about the same release.
Bernoff’s principle of corporate bullshit
How can you spot bullshit in corporate releases? Read any statement and ask this question: could you imagine any corporation saying the opposite of this statement? If so it’s meaningless doubletalk and adds nothing.
With this in mind, let’s examine some choice passages in this 1647-word release.
Your lead should say something, rather than nothing
Any release that includes the word shareholder in the title and first sentence is burying something important. In the excerpts below, I’ve highlighted corporate bullshit in bold. Here’s the lead (and look how much of it is bullshit):
CINCINNATI–(BUSINESS WIRE)–Aug. 11, 2016– Macy’s, Inc. (NYSE:M) today outlined a series of initiatives to drive profitable growth, enhance shareholder value and strengthen Macy’s as America’s preferred omnichannel shopping destination. The company will heighten the Macy’s brand with exclusive products and an improved shopping experience. Plans also include re-creating Macy’s physical store presence as customer shopping preferences and patterns evolve, reallocating investments to highest-growth-potential store and digital businesses, and capitalizing on opportunities within the company’s real estate assets.
Bernoff’s bullshit principle analysis: What company doesn’t want to drive profitable growth and enhance shareholder value? This is not news, so why is it in a news release?
Watch out for weasel verbs: Most weasel words are adverbs and adjectives, but verbs can be meaningless too. This passage features “enhance,” “strengthen,” “heighten,” “capitalize,” and “re-create.”
Translation: Digital stores are kicking our butts, so we’re going to close some stores and sell the real estate.
Pro-forma quotes don’t inspire trust
After the lead come the meaningless quotes from corporate executives. A statement should state something:
“We operate in a fast-changing world, and our company is moving forward decisively to build further on Macy’s heritage as a preferred shopping destination for fashion, quality, value and convenience. This involves doing things differently and making tough decisions as we position ourselves to serve customers who have high expectations of their favorite stores, online sites and apps,” said Terry J. Lundgren, Macy’s, Inc. chairman and chief executive officer.
“The announcements we are making today represent an advancement in our thinking on the role of stores, the quality of the shopping experience we will deliver, and how and where we reinvest in our business for growth. In the short term, our company’s topline sales will be somewhat smaller, but the changes being made will position us to grow comparable sales more quickly and generate a level of profitability that stands out among retailers,” said Jeff Gennette, Macy’s, Inc. president, who is designated to succeed Lundgren as chief executive officer in the first quarter of 2017. “We will continue to carefully analyze consumer shopping patterns and trends, and use data and customer insights as the basis for innovations to drive the business. You can look forward to a company that expedites decision-making, moves faster, and is bolder in its approach to the customer.”
Bernoff’s bullshit principle analysis: Could you possibly disagree with “fast changing world?” Are you excited that Macy’s is “moving forward decisively,” “doing things differently,” and “making tough decisions”? I guess that things will be better because in contrast to a sloppy approach, Macy’s will “continue to carefully analyze consumer shopping patterns.”
Make statements count: If a release is about a problem and the resulting change, corporate quotes should tell us what’s changed, not what’s the same. Delete vacuous quotes, they do nothing but pad the word count.
Translation: We’re going to close stores and invest in online and apps. We’ll generate less revenue but, eventually, more profit. And we’ll try to stop getting tangled up in our own underwear as we make decisions.
Store closings: Just say what you mean
Here’s the actual news, which Macy’s does a fair job of explaining once they get to it:
Re-creating the Macy’s Store Portfolio
Macy’s is re-creating its physical store footprint to capitalize on Macy’s unique competitive advantage of operating in the most attractive retailing locations in America. While still maintaining a significant bricks-and-mortar presence in 49 of the top 50 U.S. markets, Macy’s will operate fewer stores and concentrate its financial resources and talent on our better-performing locations to elevate their status as preferred shopping destinations. Stores will remain critical customer touchpoints for Macy’s, along with online shopping and mobile apps, as omnichannel retailing continues to evolve.
As part of this strategy, the company intends to close approximately 100 Macy’s full-line stores (out of a current portfolio of 728 Macy’s stores, including 675 full-line locations). Most of these stores will close early in 2017, with the balance closing as leases and certain operating covenants expire or are amended or waived. In a number of cases, stores will be closed as the value of the real estate exceeds their value to Macy’s as a retail store. The locations of the 100 stores to be closed will be announced at a later date, once the company makes final decisions. The company will act to remain connected to customers of the stores it will be closing by supplementing merchandise assortments in surrounding locations, as well as through the company’s online site and mobile app.
“Customers nearly everywhere in America will have easy access to Macy’s stores, with the additional convenience and increased functionality of our dynamic digital offering,” Gennette said.
“Nearly all of the stores to be closed are cash flow positive today, but their volume and profitability in most cases have been declining steadily in recent years. We recognize that these locations do not yield an adequate return on investment and often do not represent a customer shopping experience that reflects our aspirations for the Macy’s brand. We decided to close a larger number of stores proactively so we can invest in a winning customer experience in our most productive and highest-potential locations, as well as invest in growth sooner and more aggressively in digital and mobile,” Gennette said. . . .
Together, annual sales volume of the approximately 100 closed locations, net of sales expected to be retained in nearby stores and online, is expected to be roughly $1 billion. The reduction in EBITDA is expected to be offset by expense savings beyond those associated with store closings.
Bernoff’s bullshit principle analysis: Since this section includes more actual facts, it’s more substantive. But Macy’s “unique competitive advantage” is not unique, and calling stores “critical customer touchpoints” is just 21st century retailer jargon
Passive voice evades responsibility: Even as the facts get meatier, the language gets more passive. We know you’re saying “certain operating covenants expire or are amended or waived” because you don’t want to say who’s amending and waiving them. When you say “stores will be closed,” we know who’s closing them, Macy’s management. And annual sales of the closed locations “is expected to be roughly $1 billion”? Who expects that? Zombies?
Translation: We’re closing stores that make $1 billion per year. They’re less profitable than the other stores, they’ve gotten run-down, and we can make more money by selling the real estate.
The release includes another few hundred words about digital investments, but it’s more of the same doubletalk with the occasional nugget of information and some detail on the financials.
Lessons from this release
The more words you use to explain bad news, the worse it gets. Press releases like this are a complete cover-your-ass situation, and everybody knows it. Read the articles about this announcement and you’ll see that the attempts at evasion were worthless. Don’t waste energy burying the truth.
Instead, actually say what you mean.
What would happen if Macy’s release looked like this? Seriously, why not? It’s only 154 words, and those are the words that matter.
Macy’s will close 100 stores, invest in digital
Macy’s needs to be more profitable. Continuing to invest in all of our stores is not the best way to accomplish that goal.
We’re going to close 100 of our 728 stores in early 2017. Those stores aren’t growing revenue fast enough, they’re less glitzy than the other stores, and we can make more money from selling the locations in the real-estate market than keeping them open.
Those closed stores will result in our losing $1 billion in revenue, but we’ll become more profitable in the long-run by investing in a different set of assets. And of course, we have a fair severance plan for relocating or helping the workers who lose their jobs.
We’ll beef up our digital store and apps and improve the experience in nearby stores to retain the customers. We are the sixth-largest online retailer already.
Don’t worry, America, we got this.