Macy’s investing millions to fund diverse-owned businesses
Macy’s is investing to promote vendor diversification.
The department store giant has partnered with Momentus Capital to launch a program to advance entrepreneurial growth and increase investment in diverse-owned and underrepresented businesses. During the next five years, Macy’s will invest a total $30 million in the new program, which is called S.P.U.R. Pathways: Shared Purpose, Unlimited Reach.
The initiative is a multiyear, multifaceted funding program that ultimately will include access to as much as $200 million in capital for underrepresented businesses. It will feature a comprehensive range of financing options from growth equity capital to loans for working capital and commercial real estate.
Additionally, the S.P.U.R program will provide a full suite of educational resources, fueling a holistic supplier ecosystem and acting as a catalyst for outsized growth, Macy’s said.
Macy’s $30 million investment in the program consists of a $20 million investment in its own supplier access fund, and an additional $10 million investment. A third channel creates a pipeline to a Momentus Capital loan program anticipated to provide up to $100 million in capital access to businesses at various stages of development. The retailer said total financing for these programs would equal $200 million.
Other retailers are also looking to expand their portfolio of diverse-owned businesses. Target has committed to spending $2 billion with Black-owned businesses by 2025. Walmart partnered with financial technology company C2FO to offer an expanded early payment program for diverse and minority-owned businesses.
Earlier this year, Macy’s introduced Mission Every One program, through which it will direct $5 billion of the company’s spend, scaling through 2025, to the partners, products, people and programs that help create a more equitable and sustainable future. A portion of the spend will support investments in business development programs, including S.P.U.R. Pathways and The Workshop at Macy’s, the retail industry’s longest-running retail development program, which has empowered more than 200 diverse-owned brands.
“As part of our social purpose platform, Mission Every One, this investment will provide access to capital resources that will advance the next generation of brands and service providers, said Macy’s chairman and CEO Jeff Gennette. “By investing in high-growth underrepresented businesses at all stages of growth, we intend to create meaningful economic impact within our communities, while serving our customers.”
The lack of substantial capital deployment remains a persistent obstacle to underrepresented businesses’ success, according to Macy’s. As an example, in 2021, startups with at least one Black founder only had access to 1.3% of total venture capital dollars invested in the United States.
“By facilitating equity investment and loan access opportunities, Macy’s, Inc. believes S.P.U.R. Pathways will drive accelerated business growth among diverse-owned and underrepresented businesses and entrepreneurs,” the retailer stated.
“With Macy’s, Inc., we have a unique opportunity to offer underrepresented businesses the resources to grow in a more equitable environment,” commented Raymond Guthrie, chief investment officer and head of Capital deployment for Momentus Capital. “The Macy’s, Inc. supplier ecosystem provides access to comprehensive tools, industry experts, educational resources, and now with funding through our collaboration and the formation of S.P.U.R. Pathways: Shared Purpose, Unlimited Reach, creates an unparalleled opportunity within the retail industry. Access to capital and expertise fuels mutual growth and fosters wealth creation and entrepreneurship within historically underfunded communities.”