Macy’s In and Field’s Out in Federated Announcement
By George Anderson
Federated Department Stores has a plan and it is heavy on the Macy’s and Bloomingdales and totally
Marshall Field’s free.
Yesterday, the department store operator announced changes that would eliminate about 6,200 jobs with the phase out of divisional operations and corporate headquarters positions from the former May Department Stores Inc. It also announced it would change the banner on all 62 of Marshall Field’s stores to Macy’s and sell off the bridal group business it acquired in the deal with May’s. It has yet to make a decision on what it will do with Lord & Taylor.
Federated said all stores, offices and operations will remain in place through the 2005 holiday selling season and reiterated its pledge that there will be no job cuts until March 1, 2006.
“To better serve our customers in this highly competitive retailing environment, we must concentrate on our best national brands and reduce costs so we can deliver outstanding value to shoppers,” said Terry Lundgren, Federated’s chairman, president and chief executive officer in a released statement. “We believe that continuing to build Macy’s and Bloomingdale’s aggressively across America will accelerate our comp store sales performance and increase profitability, thereby driving shareholder value.
“By announcing these decisions now, we can begin more specific planning for the future. This includes discussing potential career opportunities within Federated for May Company employees and ensuring new merchandise assortments are in place as soon as possible in stores acquired from May. We will begin buying and planning Macy’s assortments this October so goods are in-store during the third quarter of 2006,” he said.
Michael Appel of Quest Turnaround Advisors told The Associated Press, “The moves are a logical extension of Federated’s strategy. Macy’s nameplate is going to take over, and they are streamlining the old divisional operations of the May company and putting them under the Macy’s umbrella.”
Logical or not, many in Chicagoland are not pleased with Federated’s decision to do away with the Marshall Field’s and replace it with the Macy’s banner. In an unofficial poll on the Chicago Tribune Web site, 90.5 percent (as of 7:30 EST) said changing the name would make a difference to them. Nearly 97 percent said the name change would make it less likely they would shop at the store.
Federated’s Lundgren said the decision over the Field’s name was “difficult, challenging and emotional.”
“It’s a hard thing for anyone to accept a big change, but it’s an opportunity for us to move the business forward,” he said.
While the name will change, Mr. Lundgren said the important qualities that made Marshall Field’s what it is will remain the same. “We have complete and total respect for the traditions of Marshall Field’s,” he said. “We’ll protect those traditions. … But we also have a commitment to improve the business.”
Moderator’s Comment: What is your reaction to Federated Department Stores’ announcement? –
George Anderson – Moderator
- Federated Announces Strategic Decisions to
Integrate May Company Acquisition – Federated Department Stores, Inc./Business Wire
- Federated plans to cut up to 6,200 jobs – The
Associated Press/Business Week online
- Field’s No More – Chicago Tribune
- Field’s name dropped – Chicago Sun-Times
- Federated to trim 1,110 jobs in Boston – The Boston
- The evolution of Federated Department
Stores – St. Louis Post-Dispatch