So long Marshall Field's
Conversion expected by next fall
-- Home Accents Today, 9/20/2005 1:22:00 PM
Federated Department Stores will say good-bye to the Marshall Field's name. The company announced today that all Marshall Field's stores would be converted to Macy's in the fall of 2006. This includes 62 locations in Michigan, Illinois, Minnesota, Wisconsin, North Dakota, Indiana, Ohio and South Dakota that will continue to be operated by the Minneapolis-based division that will become known as Macy's North.
"We have great respect for the legacy and traditions of Marshall Field's, and we carefully researched customer preferences and studied alternatives before making this decision to incorporate Marshall Field's into the nationwide Macy's brand," said Terry Lundgren, Federated's chairman, president and CEO. "While the store's name will change, much of what customers love will stay the same, including Marshall Field's traditions and its outstanding record of community and charitable giving. As part of this name change process, we will do everything we can to honor the Marshall Field's heritage, particularly in its Chicago birthplace."
In a press release, the company announced more strategic decisions, including its plan to build the Macy's and Bloomingdale's brands and reduce costs.
"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," Lundgren said. "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."
Federated stores will operate through seven geographic divisions, each responsible for store management and operations, soft goods merchandise buying and planning, human resources, finance, marketing, visual merchandising and other functions in its region. The New York-based Macy's Home Store division will retain responsibility for home-related merchandising and marketing in all Macy's stores, including (beginning in 2007) those to be operated by the newly created Macy's Midwest and Macy's North divisions. All stores, offices and operations will remain in place through the 2005 holiday selling season. The company reiterated its pledge that there will be no workforce reductions or job eliminations as a result of the merger prior to March 1, 2006.
The divisions will be:
Macy's East, based in New York, which will grow to encompass 42 Filene's stores in New England; 34 Hecht's stores in Md., Pa., Va. and D.C.; 16 Kaufmann's stores in N.Y. and 12 Strawbridge's stores in Del., N.J. and Pa. Macy's East will operate approximately 185 stores in 12 eastern states and Washington, D.C.
Macy's Florida, based in Miami, which will assume responsibility for the Macy's East store in San Juan, P.R. at a point to be determined. Macy's Florida then will operate 62 stores in Florida and Puerto Rico.
Macy's Midwest, based in St. Louis, will retain responsibility for 38 locations in four states now operating under the names of Famous-Barr, L.S. Ayres and The Jones Store, as well as 38 Kaufmann's locations in N.Y., Ohio, Pa. and W.Va. and six Macy's stores in Pa. and Ind. now operated by the Macy's Central division. By spring 2007, Macy's Midwest will assume responsibility for an additional 24 Macy's, three Kaufmann's and one Famous-Barr store in Ohio, Ky., Ind. and W.Va. By early 2007, Macy's Midwest will operate approximately 110 stores in nine states.
Macy's North, based in Minneapolis, encompassing what is now the Marshall Field's division of May Company. It will retain responsibility for 62 stores in eight states now operating as Marshall Field's, as well as assume responsibility in fall 2006 for one Ayres store in Ind. and one Macy's West store in Minn.. In total, Macy's North will operate approximately 64 stores in eight states.
Macy's Northwest, based in Seattle, which will grow to encompass 20 Meier & Frank stores in Ore., Wash. and Utah. In total, Macy's Northwest will operate approximately 71 stores in six states.
Macy's South, based in Atlanta, encompassing most of what is now the Macy's Central division. It will grow to include 59 Foley's stores in Texas, Okla. and La.; 33 Hecht's stores in N.C., Tenn. and Va.; two Macy's East stores in La.; one Macy's West store in Texas, and one Famous-Barr store in Ky. On an interim basis, it also will be responsible for three Kaufmann's stores in Ohio and W.Va. and a second Famous-Barr store in Ky. After systems conversions expected by spring 2007, the four interim locations and 24 other stores in Ohio, Ind., Ky. and W.Va. operated by Macy's South will be transferred to Macy's Midwest. By early 2007, Macy's South will operate approximately 133 stores in 10 states.
Macy's West, based in San Francisco, which will grow to encompass 44 Robinsons-May stores in Calif., Nev. and Ariz. and 17 Foley's stores in Colo., N.M. and Texas. In total, Macy's West will operate approximately 187 stores in six states.
Following these realignments in February 2006, Federated will gradually phase out central office operations of the Filene's/Kaufmann's division in Boston, Foley's division in Houston, Hecht's/Strawbridge's division in Arlington, Va., and Robinsons-May/Meier & Frank division in Los Angeles. These consolidations will affect approximately 4,500 divisional headquarters employees. As many affected divisional headquarters employees as possible will be offered positions elsewhere in the company. All May Company division headquarters employees who remain with the company until March 1, 2006, and are thereafter separated involuntarily will receive severance packages and outplacement assistance.
Federated will begin phasing out operations at the May Company corporate headquarters and May Merchandising Corporation offices in St. Louis on March 1, 2006, with most positions eliminated by the end of 2006. Some limited functions may remain for as much as 36 months. Together, these two organizations currently employ approximately 1,700 persons. Some corporate positions in regional offices are expected to remain in St. Louis. As many current May Company corporate and merchandising organization employees as possible will be offered the opportunity to fill new positions being created across the country, including at the Macy's Midwest division, Federated's Cincinnati corporate headquarters and at Macy's Merchandising Group in New York.
At least two May Company private brands, Karen Scott and John Ashford, will be integrated into MMG and offered in all Macy's stores beginning in fall 2006. Other May Company private labels and brands will be discontinued over time. All May Company corporate employees who remain with the company until March 1, 2006, and are thereafter separated involuntarily will receive severance packages and outplacement assistance.
Three stores acquired from May Company will be closed in 2006 and later reopened as Bloomingdale's after extensive remodeling. Also a new Hecht's store currently under construction in Chevy Chase, Md. will be opened as a Bloomingdale's. The nearby Hecht's store will close, as scheduled. This will bring Bloomingdale's store count to 40.
Federated will study the Lord & Taylor division during the remainder of 2005 and make a decision about its future by the end of the current fiscal year. It intends to divest the Bridal Group division it acquired from May Company. Credit Suisse First Boston and Banc of America Securities LLC will be advising Federated in exploring the various strategic options for this business.
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