David’s Not Even a Handmaiden to Federated

Discussion
Nov 10, 2005
George Anderson

By George Anderson


Federated Department Stores does not even count David’s Bridal in its performance numbers. As far as the company that owns Macy’s and Bloomingdale’s is concerned, David’s is “a discontinued operation.”


Federated spokesperson Jim Sluzewski said the company would report the performance of David’s 245 stores along with the 454 operated under the After Hours Formalwear banner and 11 Priscilla of Boston locations until they were sold.


The three businesses made up May Department Stores’ bridal division and were acquired with the rest of the company by Federated.


Last year, The Philadelphia Inquirer reported, the bridal group generated $704 million in sales.


Moderator’s Comment: What will a sale mean for Federated and the three bridal division businesses?


The obvious influx of cash through a sale is certainly going to be a help to Federated as it moves forward. Also, not having to manage the bridal divisions
will help the department store focus on its core objective of nationally branding Macy’s.


Still, we can’t help but wondering why a department store operator that looks upon bridal registries as a means of growing its business would be looking
to divorce itself from stores that focus on the event.

George Anderson – Moderator

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3 Comments on "David’s Not Even a Handmaiden to Federated"


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Al McClain
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Al McClain
15 years 3 months ago

The message is that Federated only wants to operate national DEPARTMENT stores. It’s hard for most people to understand why companies in that business wouldn’t want to diversify into complementary businesses, which this is. It sure can’t help the selling price to label it as a discontinued operation before there are any takers.

Carol Spieckerman
Guest
15 years 3 months ago

I agree with George on one level – bridal is hot, hot, hot but it is also crowded, crowded, crowded…everyone from J. Crew to Men’s Warehouse have made forays into bridal…yet it is a completely unique apparel business with its own rules and processes and Federated would be better off shedding than forgetting!

Mark Lilien
Guest
15 years 3 months ago

A few days ago, an exchange in RetailWire noted that Federated started Aeropostale but that Aeropostale didn’t reach peak profitability until after it was spun off. No doubt, David’s Bridal will enjoy similar success. Bridal margins are excellent, the average spend is outrageous, the risk is low; so the new owner will be getting a great business if the price is reasonable. As family size gets smaller, spending per bride skyrockets. David’s should run the bridal business of Federated as leased departments, in addition to its standalone stores, so the profit potential is two-fold.

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