Yesterday I had the pleasure of visiting with Tom Keene and Ken Prewitt on Bloomberg radio about the principles in When Growth Stalls (click here to listen). During the course of the conversation, Ken brought up the loss of focus principle in the context of department stores.

My mind immediately flashed on an article that appeared Wednesday in the Wall Street Journal about how Macy’s is “picking at the bones of fallen competitors” by stocking its formal rivals’ most popular products. It’s a profitable yet potentially risky strategy.

For example, the company is expanding its selection of bridal products in the wake of New York furniture and jewelry retailer Fortunoff’s bankruptcy (and considering offering patio furniture, which Fortunoff moved by the truckload). It’s also stocking additional cosmetics in its West Coast locations following the demise of Mervyn’s, and adding premium chocolate and more “moderately priced apparel” in Pittsburgh based on products offered by retailers that have bitten the dust there. All of this in addition to the company’s “My Macy’s” initiative, which already allows local stores to customize up to 20% of their inventory to suit local tastes.

Hmmm. I smell danger. Stepping into the breach of a dynamic competitive marketplace in order to gain market share is smart. Stocking merchandise just because you can sell it is playing with “loss of focus fire,” something with which department stores naturally struggle. If Macy’s isn’t careful, its iconic brand could get burned.