We compared shopping at TJ Maxx and the new kind of store Macy's launched to compete, and the winner was clear (M)

Business Insider/Mary Hanbury

• Macy's is doubling down on its off-price concept, Backstage, which sells many of the same brands as a typical Macy's store, but at a steep discount. 
• In a call with investors on Wednesday, Macy's CEO Jeff Gennette said the retailer will have rolled out this concept to 120 stores by the end of 2018. He had previously said it would be added to 100 stores.
• "This has been a good story for us," he said, adding that early adopters of the Backstage model — stores that added it in 2016 and 2017 — have seen positive sales growth.
• We compared the shopping experience at Macy's Backstage and TJ Maxx to find out which off-price store is better. 

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Macy's wants in on the off-price boom. 

America's biggest department-store chain is doubling down on its off-price concept, Macy's Backstage. In February, the retailer announced it would be rolling out the Backstage concept to 100 of its stores this year. On Wednesday, during an earnings call with investors, Macy's CEO Jeff Gennette updated that number to 120 stores. 

"This has been a good story for us," he said. "We are satisfied with our results ... it's clearly a strategy that is resonating with customers."

Gennette said the company is closely monitoring the 40 stores that added Backstage sections in 2016 and 2017 and has seen positive growth there. 

Macy's isn't alone in wanting to tap into the off-price model. Nordstrom has a similar concept, called Nordstrom Rack, that similarly takes inspiration from off-price stores like TJ Maxx and Ross Stores. 

It makes sense that department stores would want to emulate an off-price model. Same-store sales numbers have been strong at off-price stores while many department stores have suffered in recent years. But department stores have one major disadvantage while operating in this space. Their off-price stores have to co-exist with their full-price stores, which also offer discounted products, potentially leading to brand confusion for customers and vendors.

"The deck looks stacked against them," a group of Morgan Stanley analysts wrote in a note in May 2017. The analysts wrote that off-price stores such as TJ Maxx have a structural advantage over department stores since they have a large vendor base that has been built up over decades. Some of the products sold at TJ Maxx are made specifically for the store by certain brands. 

Macy's Backstage has a separate buying team and sells a mix of products from new and existing vendors, both from the current and the last season. A spokesperson for Macy's confirmed that Backstage also sells overstock from its other full-price stores but said this makes up a limited amount of its inventory.

We decided to put the two stores to the test. Here's the verdict from a trip to visit both Macy's Backstage and TJ Maxx in June:

Our first stop was at a Macy's Backstage store in Queens Place Mall, New York.

Business Insider/Mary Hanbury

Though this is a standalone Macy's Backstage store, there is a traditional Macy's store in the same mall.

We were greeted by makeshift tables with deals on Father's Day gifts at the front of the store.

Business Insider/Mary Hanbury

We headed to the beauty section first. It was instantly apparent that this store doesn't stock only well-known brands, as there was a wide mix of lesser-known labels.

Business Insider/Mary Hanbury

The store, overall, stocked more inventory on each item than we expected. 

See the rest of the story at Business Insider

See Also:

• We went shopping at Macy's and JCPenney to see which was a better department store, and the winner was clear
• These popular brands say Trump's tariffs will force them to raise prices
• 13 things you probably didn't know about '2-buck Chuck,' Trader Joe's notoriously cheap wine

SEE ALSO: We shopped at Target and TJ Maxx to see which was a better store — and the winner was clear