NEW YORK, United States — Macy's Inc. picked a career insider to be its next chief executive officer, betting that a manager with a background in merchandising can figure out a way to reinvent the struggling department-store chain.

President Jeff Gennette, a 33-year company veteran, will take over the top post from Terry Lundgren in the first quarter of 2017, Macy’s said in a statement Thursday. Lundgren, who turns 65 next year, will remain executive chairman after 14 years at the helm.

The announcement comes as Macy’s looks to make big changes to how it operates, hoping to stem the loss of customers and satisfy activist investors eager for the company to sell its valuable real estate.

“The most effective strategies are the ones that can be executed,” Gennette said in an interview. “We’re not ready to announce big strategic changes today, but we’re working on what we need to do in the future.”

Mall Malaise

Gennette, 55, faces a tough task. Shoppers are abandoning the mall and turning to the internet and social media to discover new trends and shop. Brands are looking to form their own relationships with consumers as the influence of department stores declines.

“An insider has a better shot because he will be aware of the culture and all the talent,” said Liz Dunn, chief executive officer of the consulting firm Talmage Advisors. “The things that are needed are pretty dramatic. They’ve got a brand challenge and a customer challenge, and the two are linked.”

The one drawback to tapping Gennette would be if it turns out that Macy's needed a leader with experience in the supply chain, fashion trends and online retailing, Oliver Chen, an analyst at Cowen & Co., said in a note. Even so, he said Gennette "could be a solid fit" and an effective leader for the biggest US department-store chain.

Losing Confidence

Before he was named president, Gennette served as chief merchandising officer since 2009. He previously ran Macy’s West in San Francisco. A San Diego native, he is a graduate of Stanford University.

Lundgren has overseen five straight quarters of declines in comparable-store sales, a closely watched measure. Investors have been losing confidence in a turnaround, and shares have dropped 52 percent in the past year. Still, Lundgren said he’ll remain at the company as long as he’s helpful to the management team.

“We’re in set-up mode, and I can clearly visualize our comeback,” Lundgren said in an interview. “What we’re about to accomplish is something I’m very proud of.”

For his part, Gennette said Macy’s is “maniacally focused” on the customer. The company is working on personalising its offerings through consumer insights and technology, he said.

Macy’s may be able to use its extensive customer data to develop methods to harness its broad assortment and tailor the presentation to individual interests, Dunn said. Still, the company will also need to make its stores more engaging and should look to brand partnerships to interact with customers when they do come to the mall.

“It’s not about having as much crap as possible in a physical Macy’s store anymore,” Dunn said. “It’s about showing me the product most relevant to me, whether that’s digital or in store and having some engine behind it.”

By Lindsey Rupp; editors: Nick Turner and Mark Schoifet.