Latest Deal Renews Name Game Debate

By George Anderson
Contrary to rumors, industry analysts say, the regional department store is not dead.
The announcement that Bon-Ton Stores would acquire the Northern department store group of Saks Inc. (the deal is expected to close in April) is not exactly bringing ringing endorsements from retail industry watchers but many see opportunities for the combined company to exploit market opportunities.
Anne Brouwer, a partner at the retail consulting firm of McMillan Doolittle, told the Milwaukee Journal Sentinel, “One opportunity that the combined company offers is the significantly stronger buying power and the ability to build relationships with vendors.”
Another, said Burt Flickinger, managing director of Strategic Resource Group, is the recognition that consumers in certain markets have with local department store banners. Federated Department Stores, said Mr. Flickinger, made a mistake changing Marshall Field’s to Macy’s.
“Now that Federated is blowing up the Marshall Field’s stores, that’s going to create a big opportunity for Carson Pirie Scott and Bon-Ton,” he said.
Britt Beemer, chairman of America’s Research Group, agreed. “If I were Carson, I would relish the opportunity to keep my name. The Carson Pirie Scott name is very big in Chicago.”
Michael MacDonald, chairman and chief executive officer of Saks’ Northern Department Store Group, will be staying on with the company following the merger. He endorsed keeping the local identities of the department stores within the group.
“We are pleased that we can continue to serve our many loyal customers under our Carson Pirie Scott, Bergner’s, Boston Store, Herberger’s, and Younkers nameplates, several of which have over 100 years of equity in the markets we serve,” he said in a released statement.
Mr. Flickinger believes Bon-Ton can also benefit from Mr. MacDonald and the rest of the talent that comes with its purchase of the Northern group.
“If Bon-Ton successfully retains the top merchants, regional managers, department store managers,” he said, “transferring that Northern department store group knowledge into Bon-Ton and Elder-Beerman can be a real corporate coup.”
Moderator’s Comment: Is there room for regional and local department stores in a marketplace increasingly dominated by national or near national banners?
What will it take to survive in a market where the 280 stores to be operated by Bon-Ton will be going up against Federated and others? –
George Anderson – Moderator
- Selling the merger plan – Milwaukee Journal Sentinel
- The Bon-Ton To Acquire 142 Stores From Saks Incorporated For $1.1 Billion In Cash – The
Bon-Ton Stores, Inc.
Join the Discussion!
10 Comments on "Latest Deal Renews Name Game Debate"
You must be logged in to post a comment.
You must be logged in to post a comment.
It’s easy for the new owners to quickly do some market research in each locality to determine what people think of each local brand. The research results can help drive the decision about name retention. However, the name of each store is not as important as what goes inside each store and the cost structure of each division. If name retention automatically requires redundant excessive overhead, it might not be worthwhile. If different names are retained, but the assortments are boring, who cares?
If Bon Ton takes time to get to know the customers in the region and can create a store with a distinguishing characteristic that meets their need, they have an advantage that national chains do not have. With large national chains offering more standard formats, goods, and services, stores that cater to local needs certainly have an opportunity to exist and thrive.
Another article from the Buffalo News, suggests Bon-Ton will being able to upgrade its image through this acquisition by gaining control over its own label and building on the fashion expertise of the Northern Department Store Group (NDSG).
Bon-Ton, according to company president and CEO Bud Bergren, will now have the size to independently create and source its own private label. It currently gets its private label lines from a competitor – Federated Department Stores.
Mr. Bergren also sees the acquisition helping the overall company to become more fashionable. “They (NDSG) tend to be more updated than we are. We tend to be a little more traditional.”
Does it really matter what the name plate is? The merchandise mix will change. The buyers will be different. There will be swimsuits when they don’t need them and no outerwear when they need them. What is missing in all national chains are the regional differences. What makes regional department stores special or unique is their ability to buy merchandise for their market, not the whole country – NOT the name on the building.
One more quick comment:
Saks was already being a good neighbor to its communities….it was positioning itself to bring all the logos together from the company together with the signature Bergner’s, now Carson’s, red asterisk symbol. It shows unity of the company as one entity, but it also shows brand loyalty to the communities it serves by preserving the name and sometimes the font of the existing company’s logo.
Yeah, but shoppers relate to the stores name on the outside more than the product inside. The name means something to people of the native area…..Why can’t people understand that? Consumers feel ownership and are more likely to shop there.
Omnisuperstore may be right about Chicago. How else do you explain the Sox winning the Series but the Cubs are still the city’s most popular team?
Of course, the name on the outside of the building came to mean something only after many people had taken advantage of the unique products and service that were inside to begin with.