Macy's Mentors Minority Vendors

Terry J. Lundgren, Macy’s chief executive officer, has research showing that more than half the people in the biggest Macy’s urban markets—including New York, Los Angeles, and Chicago—are Hispanic, African-American, and Asian. The chain already uses various tactics to woo minority shoppers, such as its deal to sell an exclusive line from rapper-turned-clothier Sean “Diddy” Combs. Coveting a deeper relationship with minority customers, Lundgren decided to seek out mom-and-pop retailers already serving minority consumers and get their products on Macy’s shelves.

Small businesses, however, often lack the wherewithal to supply a behemoth like Macy’s, the second-largest U.S. department store chain after Sears Holdings. So Macy’s last year developed a training program designed for minority vendors. Participants learn the basics of big-time retail, and the most promising get to sell through Macy’s. In November the retailer awarded its first orders to four graduates: two makers of cosmetics targeted at African-American and multi-ethnic women; a designer who makes dresses primarily for Hispanic women; and a designer of plus-size swimsuits. “We are doing this not just as a nice thing,” Lundgren says, “but as a business proposition.”