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July 29, 2005
Field's Watch: Name stays for now, Lord & Taylor safe
Since Old Orchard has department stores owned by Federated Department Stores (Bloomingdale's) and The May Department Stores Company (Lord & Taylor, Marshall Field's), here at the Triple-O we've been closely monitoring the Federated-May merger and the impact it will have on the mall and beyond.
With the merger pretty much finalized, as expected Federated announced this week that it is converting 10 individual May department store brands to the Macy's brand by fall 2006, resulting in Macy's bumping up to 730 stores across the country. Fortunately for us here in Chicago, that number does not include Marshall Field's at this time. Federated mentioned that they won't be converting Lord & Taylor to Macy's (as previously speculated by many back in June). The decision on the future of Marshall Field's won't be decided until "before Christmas." The company will also be closing 68 stores, while looking at converting others to Bloomingdale's.
The fact that Federated is keeping the Lord & Taylor brand rather concerns me, as that seems to be an outlier for them, somewhat hurting their "two nationwide brands" concept. Would they want another oddball brand in Marshall Field's as well? According to the Chicago Sun-Times, many are speculating that Field's may remain in name-only at the State Street location, while the other stores in the chain make the Macy's move. I guess we just continue to wait and hope they keep it Field's!
So, which chains lost their individual history and will now be assimilated by the Macy's Borg?
Famous-Barr (MI, IL, IN, KY)
David May started what became The May Department Stores in 1877. By 1892, his company acquired The Famous Clothing Store in St. Louis. Later, in 1913, he acquired the William Barr Dry Goods Company (founded 1849) and combined it with his other stores to become Famous-Barr. Thus, this Midwest chain has always been a part of The May Department Stores Company.
Filene's (CT, ME, MA, NH, NY, RI, VT)
Boston-based chain, and as such, lots of stores in the Northeast. Founded by William Filene in 1849. Despite similar names, not affiliated with Filene's Basement. Acquired by May from Federated in 1988. And the cycle continues.
Foley's (CO, LA, NM, OK, TX)
Primarily a southwestern store chain, it was originally founded as a Houston, TX, dry goods store in 1900 by the Foley brothers. Federated ended up owning Foley's, but sold them to May in 1988. Now they have them again.
Hecht's (DC, MD, NJ, NC, PA, TN, VA)
Founded in 1857 by Samuel Hecht, Jr. based in the New England area. Stores are primarily located in the East with an HQ in Washington, DC. Acquired by May in 1959. Contains previously acquired stores of Thalhimer's, Hess's, Wanamaker's, Woodward & Lothrop, and Strawbridge and Clothier.
Kaufmann's (NY, PA, OH, WV)
Founded in Pittsburgh in 1871, now based out of Boston. Located primarily in the northeastern part of the US. Acquired by May in 1946.
L.S. Ayres (IN)
Lyman S. Ayres purchased a dry good store in downtown Indianapolis, IN, back in 1872. The L.S. Ayres Tea Room, which operated at the downtown department store from 1905 to 1990, served a clientele of fashionable shoppers in a formal setting. Acquired by May in 1986.
Meier & Frank (OR, UT, WA)
Formed by a partnership between Aaron Meier and Emil Frank in 1873 in Oregon. A Pacific Northwest chain of stores. After a bitter battle between the two surviving families, the company was sold to May in 1966. A 2002 purchase of Zion's Co-operative Mercantile Institution increased the chain's size.
Robinsons-May (AZ, CA, NV)
May's department stores merged with J. W. Robinsons of Los Angeles in 1993 to create this brand, based on the West Coast. The first May stores in the area opened back in 1923.
Strawbridge's (DE, NJ, PA)
A northeastern US chain founded by Quakers Justus Clayton Strawbridge and Issac Hallowell Clothier in Philadelphia in 1862. Flagship is still based in downtown Philly. Acquired by May in 1996.
The Jones Store (KS, MO)
Department store founded in Kansas in 1887 by founder J. Logan Jones, a guy who was born in a wigwam on an Indian reservation. Moved his Stafford, KS, store called the Cyclone to Kansas City, KS, and The Jones Dry Goods Company. Acquired by May in 1996.
Federated, you suck.
Source: Chicago Sun-Times10 chains renamed Macy's, Field's stands for now
July 29, 2005
BY SANDRA GUY Business ReporterMarshall Field's got a reprieve Thursday from a name change -- but customers will know by Christmas whether they will be shopping under a holiday tree at Macy's in 2006.
"We're going to get it done before Christmas this year," said Terry Lundgren, CEO of Federated Department Stores, which will take ownership of Field's this fall. "We're going to take our time and make sure when we make our decision, it's the right one."
On Thursday, Federated announced it is converting 10 department store banners to the Macy's nameplate in fall 2006, boosting Macy's nationwide presence to 730 stores.
The announcement leaves Field's and Lord & Taylor as the only two department-store chains being acquired by Federated whose futures are unknown.
Federated has been conducting surveys of shoppers, many with memories of Field's ornate clock and holiday windows, about a name change.
Insiders speculate that Federated may keep Field's name on the State Street flagship, and operate it as a destination store.
Asked about the possibility, Lundgren said, "It's speculation. It's a great store."
Is Federated playing politics with the Field's name?
One analyst thinks so.
"To be honest, it's all about the Field's store on State Street. There is a lot of political pressure not to convert it [to Macy's]," said Lois Huff, senior vice president of Retail Forward, a Columbus, Ohio-based retail strategy consulting firm.
Lundgren denied politics is playing a role.
"We're not going to make a move until we think it through and do the right thing by reviewing customer research," said Lundgren, who works out of Federated's offices in Manhattan.
Federated, which owns Macy's and Bloomingdale's, will acquire Field's, Lord & Taylor and the 10 other regional department-store chains after its $11 billion buyout of May Department Stores is completed sometime between Aug. 1 and Nov. 1.
The number of stores being converted to Macy's -- 330 -- represents about two thirds of May's 487 department stores.
The Lord & Taylor department-store chain will escape the Macy's conversion, but its fate is a matter of heated speculation.
Federated is studying whether a small number of unidentified stores should be renamed Bloomingdale's, and some analysts believe Lord & Taylor's highest-income stores could become Bloomingdale's.
Deborah Weinswig, an analyst at Citigroup Smith Barney, has speculated that Federated could sell Lord & Taylor's flagship store in New York for $384 million.
Lundgren said Thursday that Federated will have no information about Lord & Taylor until after its buyout of May is complete. At that time, Federated must decide how Lord & Taylor is executing its recent overhaul to upscale fashions and improved merchandising.
Before Cincinnati-based Federated makes any moves, its buyout of St. Louis-based May must win antitrust regulators' approval.
Analysts had speculated that Federated and May would be forced to sell up to 100 stores to keep from dominating the anchor stores in shopping malls nationwide.
Federated, based in Cincinnati, announced Thursday it will close 68 regional department stores in 66 malls where its anchor stores overlap those owned by May. Federated owns 27 of the stores in 14 states, and May owns 41 in 12 states. Most of the closings will occur in California, Pennsylvania and the Northeast. The closed stores accounted for $2 billion in sales last year.
Lundgren said he doesn't anticipate any more store closings.
Lundgren has cited customer research for expanding the Macy's brand, but experts say making Macy's a national name is a wise business move.
Macy's needs stores in Chicago, Detroit and Minneapolis to give it a presence in the Midwest's biggest markets.
Macy's expansion would make it easier and more efficient for Federated to advertise, manage inventory, buy merchandise from vendors and plan product assortments -- all important ingredients in staying profitable in a retail world filled with rivals ranging from Nordstrom to J.C. Penney to specialty boutiques, retail experts said Thursday.
It would be difficult to make Field's or Lord & Taylor national brands because of their small sizes and limited reach, the experts said.
Field's has 60 stores in the Midwest and Great Plains, and Lord & Taylor will have 54 stores scattered throughout the Midwest and Northeast after May divests three stores scheduled for closing.
"You can't live with these tiny little sub-brands any more. It's not cost-effective," said Robert Passikoff, president of Brand Keys, a research consulting firm based in New York.
Field's also would have trouble holding its own between middle-class Macy's and upper-class Bloomingdale's, said Huff of Retail Forward.
"Macy's is moving up-market with higher-quality goods and distinct product lines. Is it going to be any different than a Field's?" Huff said.
Even diehards' efforts to save the Field's name may not be enough.
"The core of fanatics is too small to make a difference," Passikoff said. "They're not enough to make a company profitable."
Posted by Tannerman at July 29, 2005 05:07 PM | Categories: Anchors | News | Old Orchard | Other Malls