Background
Macy’s is more than a 167-year-old department store—it’s an American cultural institution. In 2006, Macy’s ran over 800 department stores and was estimated to be worth more than $20B. Today, Macy’s runs around 500 stores and is set to close dozens of them. Its market cap, as of 2024, was just under $5B.
Despite the swift downward trend, it’s easy to forget that the department store was an early retail-industry disruptor. The way Americans shop, celebrate holidays, and pay for goods and services likely wouldn’t be the same without a few innovations from Macy’s founder.
How Macy's Became an Icon
In 1858, Rowland H. Macy opened RH Macy & Co. as a dry goods store. At the time, the store—which sold household goods such as linens—was located on New York City’s 14th Street.
Macy’s pioneered a few industry-disruptive retail concepts in its early days. For instance, at a time when bargaining was still the norm, Macy’s prices were nonnegotiable. Macy’s also required its customers to pay immediately rather than using the era’s prevailing “buy now, pay later” system. Macy’s is also known as the first store to organize its clothes by size rather than style.
If you’ve ever wondered why you’re paying $5.95 for something rather than $6, that might be because of Macy’s, too. RH Macy believed that pricing products with odd figures rather than round numbers would force his staff to be more diligent about how sales were accounted for, making it harder for them to pocket money without getting caught.
Other Macy’s innovations include helping popularize the “retail Santa” in 1862 (although there’s some debate over this) and holiday store windows in 1864.
In 1902—a few years after Nathan and Isidor Straus acquired the company and assumed full control of the business after RH Macy’s 1877 death—the store moved uptown to the Herald Square flagship that it still occupies today (here’s why it doesn’t occupy one corner of its block).
The flagship was initially around 1 million square feet. After expansion, the store grew to over 2 million square feet and became the world's largest store in 1924. The Strauses soon began opening Macy’s stores around the country, too (see the brand’s full historical timeline).
