The winter of 2015 – 2016 was one of the warmest on record in the U.S. Driven by El Niño, the average temperature was a record 4.6⁰F above the 20th century average . The precipitation total for the U.S. was 1.26 inches above the 20th century average, and ranked as the 12th wettest winter on record . During one of the warmest and wettest winters in history, many fashion retailers, including Macy’s, faced a dilemma: no one wanted to shop.
Figure 1: 
It’s estimated that fashion retailers in the U.S. lost about $572 million in sales because of the mild weather in November and December 2015 versus the same period in 2014 . In Macy’s January 2016 press release, the Company announced that comparable sales declined 4.7% in the months of November and December 2015, compared with the same period in 2014, and of that, approximately 80% of the declines were because of misses in expectations in cold-weather goods .
For fashion retailers such as Macy’s, the holiday season can account for almost 30% of sales. Given the long lead times needed to source products from manufacturers to vendors to distributors to retailers, fashion retailers like Macy’s typically plan their inventories and promotions for the holiday season during the first half of the year. Coming off one of the coldest winters in 2014 – 2015 in the Northeast, Macy’s over –indexed on cold weather goods for 2015. When the cold weather never came, Macy’s blamed the 60⁰F temperatures for interfering with its holiday inventories and promotions, and was forced to offer heavy discounts in an effort to move inventory . Even this wasn’t enough to counteract the negative sales impact, though, and in January 2016, the retailer announced that it was cutting 4,000 jobs due to the huge miss in sales expectations .
While it can be argued that there are many other factors that contributed to Macy’s poor financial performance during the 2015 – 2016 holiday season, I do believe that as a general trend, dramatic variability in weather patterns caused by climate change has a negative impact on fashion retailers such as Macy’s because of their inability to correctly forecast demand, and therefore to manage inventory and plan promotions. Experts argue that between 2% – 8% of retail revenues per year are affected by the weather . As climate change causes weather patterns to become even more unpredictable, the impact of weather on retailer financial performance can only become more pronounced. To mitigate against the risks, I think that Macy’s will need to change its business model to either place less emphasis on holiday and promotions, or significantly shorten supply chains to be able to adapt to weather-driven consumer demand on a timely basis.
Macy’s has not been sitting idle though. The company recognizes that it has a social responsibility to combat climate change. Macy’s has committed to reducing its impact on the environment by eliminating wasteful behavior, pursuing programs to consume less electricity and water, use more environmentally friendly solutions, and advocate sustainability and renewability with vendors and customers . Macy’s has also committed to short-term, quantifiable goals, including:
- Reducing energy use by another 2% in 2016, 2017 and 2018;
- Committing to having a total of 113 solar power systems at Macy’s facilities by the end of 2016;
- Increasing the amount of waste diverted from landfills to 70% by 2018;
- Maintaining the use of recycled paper for 99% of its marketing materials;
- Decreasing the waste diversion from construction by 15% over 2016 levels by 2018 .
While Macy’s has been making great strides to promote sustainability and build short-term goals, I would challenge the company to think about what their longer-term solution is in terms of both sustainability and operations. For one thing, I think that Macy’s can work to influence its vendors to reduce greenhouse gas emissions throughout the entire supply chain, as other retailers such as Walmart have done. I also think that from an operational standpoint, Macy’s will need to rethink its supply chain model. To be able to more accurately forecast demand, some companies like Target and Kohl’s have started to work with meteorologists to use weather-related data to plan collections and schedule promotions . Another option for Macy’s is to explore fast fashion, and to figure out if the Company can shorten the production cycle from the typical nine months for U.S. retailers to four months to be able to better adjust to weather-driven consumer demand.
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 “How the Weather Cost Specialty Retailers $572 million in Sales,” Weather Analytics (blog) Planalytics, January 26, 2016, http://www.planalytics.com/retailers_weather/, accessed November 2, 2016.
 “Macy’s, Inc. Reports November/December Sales and Updates 2015 Guidance.” Macy’s, Inc. press release (Cincinnati, OH, January 6, 2016).
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 Phil Wahba. “Macy’s Cutting 4,000 Jobs After a Huge Drop in Holiday Season Sales,” Fortune, January 6, 2016. http://fortune.com/2016/01/06/macys-cutting-4000-jobs-after-a-huge-drop-in-holiday-season-sales/, accessed November 2, 2016.
 Ivana Kottasova. “Fashion retailers pay heavy price for warm winter,” CNN Money, January 6, 2016. http://money.cnn.com/2016/01/06/news/companies/warm-weather-business/, accessed November 3, 2016.
 Macy’s Inc., “Our Road to Sustainability: Doing Better Every Day,” http://macysinc.com/social-responsibility/sustainability-five-point-plan/, accessed November 3, 2016.
 Teri Agins. “Warming Trend: White Jeans Year Round,” The Wall Street Journal, August 30, 2007. http://www.wsj.com/articles/SB118843034338212804, accessed November 3, 2016.