Federated Plans to Change Name to Macy's

MSN Money & Business Wire reports

The management of Federated Department Stores wants to change the company's name. The retailer said a vote on changing its name to Macy's Group will occur at the company's annual meeting May 18. If approved, the name change will go into effect June 1.

"We're no longer a federation of retail stores; Macy's is 90% of our business," CEO Terry Lundgren told CNBC today.

Federated Department Stores, Inc. was originally chosen as the company's name in 1929 by a group of family-owned department stores that joined together under a corporate holding company umbrella.

Federated became an operating company in 1945, and its portfolio over the years has included various regional department store names.

In 2005 and 2006, all regional nameplates were converted to Macy's. The company today operates only Macy's and Bloomingdale's stores, with both brands expanding nationwide.

way to flop

It’s not working.

The enhanced synergies of the Federated-May merger, much documented on this blog, are turning out to be hyperbole, at least in my neck of the woods. A recent visit to several local converted Macy’s stores confirms this.

Status Quo at Valley View
The Roanoke Macy’s seems to be one of the few former Hecht’s that has maintained its previous market position. This was a very typical Hecht’s previously, having been expanded and remodeled only a few years ago and carrying a very standard line of department store merchandise, sans furniture and rugs. Except for some small tweaks, Federated changed little about this store except its signs.

The inclusion of Federated private labels has enhanced the merchandise mix at Macy’s Valley View, though ladies’ apparel is still a little on the dull side, and the Home Store has lost some of its merchandise breadth and depth without seeming like a smaller selection. You have to give them credit for maintaining a semblance of normalcy, though it’s nowhere near as special a shopping experience as the national ads would have you believe.

River Ridge rows away
The Lynchburg location Macy’s currently occupies at River Ridge Mall must have been a ‘cash cow’ for its various owners over the years, because it’s bound to have made far more money than was invested back into it.

This store is a time warp in every sense of the word. Opened by Thalhimers in 1980 when it was still part of Carter Hawley Hale, the store received minor updates when it was purchased by May Company and turned into Hecht’s, but little else in its nearly thirty year existence. In turn, the merchandise has maintained the same general price point over the years by continually trading down its merchandise mix until the formerly upscale store is now a shell of its former self.

With its only bright spot being its involuntary position as a shrine to early ‘80s department store design, the store fails to impress. Macy’s switched out May Company private labels for Federated ones and thinned out an already paltry selection of clothes and home items.

Even with a national brand name and upmarket aspirations, it plays second fiddle to the Belk store a few hundred feet away.

Still Friendly, but not focused
Macy’s Friendly Center in Greensboro has become a retail enigma. The formerly swanky Thalhimers was heavily renovated and expanded into a fairly fashionable (for May Company) Hecht’s in the late ‘90s, only to stop its evolution somewhere around 2001.

Even with a major push to prominently feature Federated private labels like Charter Cub and Alfani ‘shops’ at prominent spots in the main floor misses department with the Macy’s conversion, this store has evolved from kitchen clean and standardized to a dated hodgepodge of fixture and merchandise styles, none of which mesh well together.

The department that bared the brunt of conversion pains is Misses Sportswear. Formerly a reliable source of classic suits and separates, the department’s push to attract younger customers have left its signature lines looking chintzy and Traditional Sportswear looking more matronly than ever.

Marked contrasts exist. A small but somewhat showy millinery section sits next to a comparatively dowdy suit and dress department. Pricey men’s cashmere sportcoats sit near an uninspiring selection of mid-market Bostonian shoes. An upmarket china selection is positioned near a rack of ‘As Seen on TV’ merchandise. To be sure, Hecht’s had similar contrasts at times, but never as pronounced or badly maintained.

Even the handful of high-end brands that sell well at the store can’t disguise the poor housekeeping and muddled vision this pace now has. Multiple burned out light bulbs in the ceiling and merchandise scattered in all the wrong places are things that Macy’s Friendly Center has that Hecht’s Friendly Center hardly ever did.

De-evolution on Wendover
How do you update an innovative department store? Apparently by removing all innovation.

Greensboro’s Hecht’s Wendover opened as a May Company test store for lifestyle merchandising, eschewing many of the traditional rules about merchandising and display in order to make the store more appealing to modern, time-starved shoppers. While not everything they tried was a success, the test results were strong enough that traditional Hecht’s stores started sporting some of the new techniques: brighter lighting, hipper brands, bigger signs, and more self-serve merchandise fixtures.

Macy’s Wendover represents the shunning of just about all that Hecht’s learned in favor of the tried and true, and decidedly boring. The Federated private labels add little to the mix. New merchandise adjacencies replaced a well-done Juniors’/ Young Men’s department with a Juniors’ department sitting next to matronly sportswear. Time saving ‘express’ checkouts near entrances were supplanted with barely-staffed traditional cash-wraps. Displays went from dramatic to anticlimactic. The total effect is antique merchandising set against a whiz-bang backdrop.

Your mileage may vary, but it’s becoming apparent, at least in this area, that things aren’t as great as they should be at Macy’s.

Big hope for small markets

Akron, as well as New York, star of Federated holiday

by Lisa Biank Fasig
Cincinnati Business Courier - December 22, 2006

To an important degree, the sales performance of Federated Department Stores this Christmas depends on how well it does in Akron.

It is in the dozens of markets such as this one, where Macy's is a new and welcome brand, that Federated has much to gain after converting some 400 May Co. stores in September, analysts and industry veterans say. Sure, shoppers in Chicago are grabbing headlines with complaints about losing the Marshall Field's brand, but in smaller markets - like Akron, Tulsa, Okla., and Rochester, N.Y., - shoppers are waiting, credit cards poised, for Macy's to lift their mediocre shopping experience.

And Federated has a high target: It recently raised its same-store sale projections for December to 5 to 8 percent, from 3 to 5 percent.

The problem? It's the original Macy's locations, known as the legacy stores, that have been driving those sales. The former May Co. locations have been "disappointing," Federated said, without providing specifics. (Federated will not break out figures of its May stores operations until February, after it has owned the company for one fiscal year.)

"They put extraordinary attention to making the transition easier in the cities where there was an emotional connection," said Candace Corlett, a principal at WSL Strategic Retail in New York. "(But) we underplayed the number of cities that are getting a Macy's."

What wasn't underplayed was the relaunch of Macy's as a national brand. Federated's ambitious advertising campaign, featuring Susan Sarandon and other stars, might have contributed to the overall strength of the department store sector this shopping season. In November, the same-store sales index of department stores rose 3.8 percent, compared with 1 percent at department stores, according to Bloomberg.

"The Federated stores are doing extremely well. They're benefiting from the advertising," said retail consultant Walter Loeb. "The May stores still have to gain an identity."

Federated has, for instance, ended the aggressive sales promotions that May customers have grown accustomed to at Christmas, Loeb said. Many shoppers are still holding out, expecting coupons and deep discounts. Meanwhile, in markets such as Cleveland, Federated underestimated the spending power of its May shoppers, said analyst Jeff Stein with KeyBanc Capital Markets.

Regardless, Wall Street is more or less forgiving Federated for May's flavorless sales. (Shares closed Dec. 20 at $38.51, up about 18 percent from one year ago.) Timing is part of the reason: Federated began swapping merchandise at May stores in September, replacing the old labels with the Macy's lineup. Some missteps were expected.

"To expect them to turn 400 stores with new merchandise, new nameplates, the same store personnel and with a reduced level of couponing -- to expect all of that to happen and not have the customers blink once or twice -- I would think is unrealistic," Stein said.

Federated spokesman Jim Sluzewski said the retailer gauged market needs by pairing converted May stores with Macy's stores in similar settings. A store in suburban Cincinnati, for instance, would serve as a starting point to determine what labels to stock in a similarly sized store in suburban Akron. The retailer also asked customers what they wanted to keep at the May stores and what they wanted to lose.

"We continue to learn as we go along," Sluzewski said. "It is simply taking a little longer than we had initially thought."

Among the unexpected trip-ups: the home department, where lead times can be three times longer than those of apparel. It can take more than a year to get certain household items on the floor.

As for markets where beloved brands were eliminated, such as in Chicago where Marshall Field's was transformed into Macy's, observers said the backlash is petering out.

"I've been to a couple of the Macy's that have been converted from Marshall Field's, and they seem just as crowded," said Morningstar Inc. analyst Joseph Beaulieu.

Corlett, for one, said she has seen an improvement in service at Macy's stores in the New York and New Jersey markets. "I think they had gotten in touch with how bad they were and they're really working on fixing it," she said.

"What shoppers expect from their favorite store is respect. Stop putting bimbos out there."

And that would apply to Akron, too.

Federated to Exchange Stores with Belk

Wilmington Morning Star and Business Wire

WILMINGTON, N.C. -- Macy's at Mayfaire will become a Belk store

The Macy's in Mayfaire Town Center, a former Hecht's location, will become a Belk next year under a swap deal between the two stores' parent companies, Belk announced Thursday.

Under the agreement, the Mayfaire store will open as a Belk in spring 2007, according to the announcement. In exchange, Belk will turn over a Parisian store in Collierville, Tenn., to Federated Department Stores Inc., the parent of Macy's.

All store associates in good standing at the Mayfaire store will be employed at the Belk, according to the statement.

Belk already operates stores at Independence Mall and Landfall Center.

Charlotte, N.C.-based Belk Inc. is the country's largest privately owned department store company, with 279 Belk stores and 36 Parisian stores in 18 states, mainly in the Southeast.

Macy's Partners With Rwandan Widows

By SARAH DiLORENZO
The Associated Press

NEW YORK -- When Macy's decided to sell baskets made by Rwandan widows, the store was swayed in part by the prospect of contributing to a developing economy and in part by the women's tale of suffering during their country's 1994 genocide.

But Macy's was clear: This may have been charitable, but it was not charity. Baskets, woven from sisal and sweet grass, are inspected to verify they meet quality requirements and then paid for in cash on the spot. Macy's imported 650 baskets last year in a successful test run, and bought 31,000 more to sell this fall in stores in New York, Atlanta and Chicago and online.

"This is a business partnership," said Ronnie Taffet, vice president for public relations at the store, a unit of Federated Department Stores Inc.

Such partnerships are becoming more common. Matthias Stausberg, manager of media relations at the U.N. Global Compact, says the compact has tried to "make the business case," showing companies how these investments can be profitable and a good alternative to philanthropy.

Lloyd Timberlake, director of communications for the World Business Council for Sustainable Development, cited some partnerships with successful results, like Starbucks Corp. and fair-trade coffee growers or DaimlerChrysler AG's investment in Brazilian coconut fiber to use as fill for car headrests.

"It's not going to get very big," he predicted of the Macy's partnership because, unlike the agricultural projects he cited, it wasn't responding to a need, but instead carving out a small niche market.

But Willa Shalit, who started a company to import the baskets for Macy's, has seen the partnership succeed already.

"When you see the child of a weaver, they have shoes, clean clothes, school uniforms, more than one set of clothing," she said.

The money a weaver receives for a typical basket is enough to feed herself for a month. That sum is on average $24, or about one-third of the retail price. Shalit estimates a weaver's income at $4 a day (it takes roughly a week to make a basket), as compared to the average income of $0.56 a day for the country.

Macy's partnership with the Rwandan women grew from perhaps an even more unusual one. The women used the traditional art of basket-making to reach out across ethnic lines after the 100-day genocide, during which at least 500,000 people were killed.

"In practical terms, basket-making is an opportunity for unity, for reconciliation," said Consolee Mukanyiligira, coordinator for the association of genocide widows, known by its French acronym, Avega.

"Nothing like sitting around doing nothing increases trauma," said Mukanyiligira, so Avega encouraged women to weave as a way of healing.

Pascasie Mukabuligo, a master weaver, saw the potential for these baskets as commercial merchandise and organized their sale at local markets. Noeleen Heyzer, director of the United Nations Development Fund for Women, then worked to establish an American market for the goods.

Karen Sherman, COO of Women for Women International, calls the project "holistic" because beyond fair pay, the weavers receive benefits like health care.

Macy's has promised to buy the baskets for as long as its customers do. And the standards an international retailer sets for its partners are high.

Shalit's team says quality is not a problem _ she contends the women make the most refined baskets in the world. The traditional baskets are pagoda-shaped, with tightly fitting lids for roofs. Many are earth-toned, beige with jagged black designs snaking around them. But other egg-shaped baskets, with only tiny lids, have bright blue and pink designs.

Shalit and her colleagues are working to train more weavers and diversify their product.

Macy's has asked their team of designers to work with the women to create a spring line that will be fresh to customers but still consistent with Rwandan tradition.

These complexities can conspire to sink projects, said Isobel Coleman, a senior fellow at the Council on Foreign Relations. "You have these one-offs. A thousand baskets here, some Mexican clothes there," she said.

Even if this partnership does not last, however, Coleman and other experts said the weavers will benefit from having honed their skills to meet the quality and scale demands of an international market.

Those skills can then be put to use to find new outlets, even perhaps local or regional ones, which Sherman said should be central to any development partnership.

"Ultimately, a local market is more sustainable," she said, and the key to a different kind of "never again" pledge, that of not letting these women slip back into their former poverty.

Lord & Taylor to leave Water Tower Place

Lord & Taylor, Water Tower Place, Chicago, Illinois. (photo by Justin Hall, 2003)

Water Tower Place store to close in spring as owner of indoor mall takes back space; fate of retailer's suburban Chicago outlets is unclear

By Sandra Jones
Chicago Tribune staff reporter

CHICAGO - Lord & Taylor plans to shutter its Water Tower Place store next spring, a move that diminishes the New York retailer's presence in the Chicago area and frees up one of the most prominent locations on the Magnificent Mile.

The decision to leave Michigan Avenue comes one day after investment group NRDC Equity Partners LLC acquired the 48-store chain from Federated Department Stores Inc. for $1.1 billion.

News of the closing follows the conversion of Marshall Field's, also at Water Tower Place, to Macy's last month and changes the face of one of the busiest shopping corners in the city. The two department stores opened as the anchors of Water Tower Place in 1975 and helped the indoor mall--a pioneer in bringing suburban-style shopping to the city--become one of the most popular tourist destinations in Chicago, with an estimated 20 million visitors a year.

Water Tower Place's owner, General Growth Properties Inc., has been eager to redevelop the Lord & Taylor space since acquiring the mall from Maryland's Rouse Co. in 2004.

NRDC, for its part, is concentrating on reviving the storied Lord & Taylor brand, particularly in the Northeast, where the retailer has been a fixture in New York for more than a century. The Purchase, N.Y.-based group, which also owns a stake in Linens 'n Things Inc., plans to put $150 million in capital improvements into Lord & Taylor stores and just hired former Saks Fifth Avenue CEO Christina Johnson to help them.

Lord & Taylor has suffered from neglect under a string of owners, most recently May Department Stores Co. It closed 32 of its weaker stores starting in 2003 and endured several turnaround attempts, losing its luster along the way.

Lord & Taylor is getting out of the Mag Mile property because the lease is up and General Growth wants to take back the space, said Johnson.

"This is not a decision of our making," said Johnson. "We would have liked to have remained."

Still, it is unclear if NRDC will keep the remaining four Lord & Taylor stores in the Chicago area. The Chicago-area stores combined generate roughly $120 million in sales, according to a person familiar with the stores. That's less than 10 percent of the chain's $1.4 billion in annual sales last year.

The remaining stores are at Northbrook Court in Northbrook, Woodfield mall in Schaumburg, Oakbrook Center in Oak Brook and Old Orchard in Skokie.

The Northbrook Court store is the most likely to be closed, according to a person familiar with the plans. General Growth is close to a deal to take the space back from NRDC and will most likely redevelop it.

General Growth officials declined to comment on the Northbrook store's future and declined to disclose plans for the Water Tower space.

"We're looking at a bunch of options," said Mitch Feldman, Water Tower's general manager. It will take three to six months to finalize plans, he said.

NRDC's Johnson also declined to comment specifically on the Northbrook store, but said, "We have no plans to close any stores."

Lord & Taylor's sales at the Mag Mile outpost have been declining for years, ringing up an estimated $25 million to $30 million a year, down from as much as $50 million in the store's heyday, according to people familiar with the store.

General Growth has been looking for ways to boost Water Tower's sales from a relatively mediocre $500 per square foot to as much as $900 within three to five years.

Department stores have traditionally paid minimal rent in exchange for their drawing power. Breaking up the seven-level, 140,000-square-foot Lord & Taylor space into smaller units aimed at specialty stores and restaurants would allow General Growth to generate high rents, said Allen Joffe, retail real estate broker at Baum Realty Group Inc. in Chicago. "Spaces like that don't come on the market very often," he said.

American Girl Place, located just down the street, looked at the site this year as a way to expand its doll store and playland for girls. Von Maur, the Davenport, Iowa-based department store, has also been eager to expand in Chicago and has had its eye on Lord & Taylor real estate.

American Girl officials couldn't be reached for comment.

New York based retail consultant Burt Flickinger predicts that despite Lord & Taylor's loyal customers in the Northeast, it has a chance to improve its business in Chicago, particularly as Macy's wrestles to attract shoppers disenchanted with its takeover of Marshall Field's.

"There is definitely a place for Lord & Taylor," said Flickinger. "When they've got their merchandising magic working for them, it's a very productive store. With consumers being very disappointed that Marshall Field's is gone, there's a great opportunity."

Lord & Taylor Sale Completed

Chain Store Age

Cincinnati - Federated Department Stores completed the sale of its Lord & Taylor division to NRDC Equity Partners of Purchase, N.Y. The final sale price was adjusted to $1.08 billion from the previously announced price of $1.2 billion because of certain lease agreements with the buyer, Federated said.

The Lord & Taylor division includes 48 stores in nine states and the District of Columbia.

Federated Throws New Weight Around

SUZANNE KAPNER
New York Post

NEW YORK -- Pressure is mounting on companies that manufacture goods sold in Federated Department Stores to change the way they do business to better accommodate the giant retailer.

Manufacturers are being asked to shorten lead times, increase the frequency of shipments and make their products more fashionable, sources said.

Federated's acquisition of the May Department Stores Company created the country's largest department store chain and the only one with a national footprint under the Macy's name.

Much the way Wal-Mart used its size to wring concessions from suppliers, Federated is exercising its newfound clout to encourage manufacturers to change how they source, make and ship goods to its more than 850 stores.

"Federated is now in a position to dictate to a greater extent, and I don't expect them to hold back," said one source, who requested anonymity.

In a series of meetings with suppliers over the past two days, Federated executives, including Chief Executive Terry Lundgren and Vice Chairman Janet Grove, laid out a plan that included more exclusive offerings and faster shipments of fashion items from once a month to twice a month.

"The typical consumer shops our stores once a week, and we need to show them something new and different," Grove said, according to someone who attended the meeting.

Grove was not immediately available for comment.

The strategy carries increased risk for both Federated, which could become too dependent on the vagaries of fashion, and its suppliers, who are being asked to restructure their businesses at a time of growing uncertainty for apparel manufacturers.

"It's a noble goal," said one executive. "But how easily can we adapt?"

With the bulk of apparel, shoes and handbags manufactured in Asia, lead times from conception to delivery can run as long as nine months, a timeframe Federated would like to whittle down to three.

One way to speed production is by stationing key executives in Asia, where they can approve samples as soon as they are made, instead of flying samples to New York and back. The shorter lead times and more frequent shipments help to increase inventory turns - the amount of time it takes a retailer to sell through inventory - which, in turn, boost sales.

Federated is using a program called 20/20 to help it quickly identify the best- and worst-selling merchandise.

The system allows Federated to quickly reorder the 20 percent of items that are selling the best and clear out the 20 percent that are selling worst by marking them down.

Traditionalists mourn demise of Marshall Field's

By CARLA K. JOHNSON
The Associated Press

CHICAGO — Protesters marched, carried signs and called for a boycott Saturday because their beloved Marshall Field's, a shoppers' magnet on State Street for more than 100 years, had been replaced by a New York icon: Macy's.

Signs with phrases like "Hell No. Not My Dough" and "Macy's Is Just Wal-Mart with Pretension" were carried by demonstrators, who also toted signature green Field's shopping bags.

The store is one of about 400 properties nationwide being converted to the Macy's nameplate by Federated Department Stores, which acquired the properties when it bought May Department Stores last year.

But unlike most of them, the big Marshall Field's store had amassed generations worth of loyalty.

Amelia James said she treasures childhood memories of dressing up in white gloves to have lunch in the store's Walnut Room with her grandmother Grace Denny Elder. She said she was going to cut up her Field's credit card and boycott Macy's.

"My grandmother was born in 1898. She shopped here her whole life," said James, 48, of Chicago. "There were six kids in our family. We didn't have a lot of money, but when she brought us here to Marshall Field's, it was one of the most special things."

The store was built in stages from 1892 to 1914. Its name came from retailer Marshall Field, who got his start as a salesman in a Chicago dry-goods store in 1852.

James was one of roughly 100 demonstrators who objected to the name change Saturday.

At the same time, hundreds of shoppers started lining up two hours before the doors opened. Once inside, they listened to a jazz quintet as they used $10 Macy's gift cards handed out to the first arrivals. Workers in Macy's T-shirts offered silver trays of doughnut holes and coffee in glass cups.

"Things change," said Chicagoan Mary Peterson, 64, the first person in line before the store opened. Peterson worked for 18 years at Field's, packing the store's popular Frango mints into boxes as they came off the conveyor belt in the candy kitchen. She said she welcomes Macy's.

Macy's officials, who said they have no plans to reverse their decision, hope to lure back any unhappy shoppers.

"We understand this is an emotional time and people are passionate about the name," Macy's spokeswoman Jennifer McNamara said. "We hope they'll give us a chance to demonstrate that the essence of what our customers love about Marshall Field's will continue at Macy's."

Macy's will retain such traditions as the Walnut Room restaurant and the green clocks at the building's corners.

Federated, based in Cincinnati, became the nation's largest department-store retailer when it bought May. The switch to the Macy's nameplate will give Federated a total of more than 800 Macy's stores in 45 states, the District of Columbia, Guam and Puerto Rico.

the big day

Macy's is now officially coast to coast. We'll see how long this lasts.

The Macy's Stars dance down Smithfield Street in Downtown Pittsburgh during a block party marking the opening of the new department store in the former Kaufmann's building. (James Knox/Tribune-Review)

Just browsing at the mall?

That's what you think

By Mindy Fetterman and Jayne O'Donnell, USA TODAY

As you step in the door of a retail store — whether it sells Gucci handbags, jeans for teens or hardware — you're being lured to shop and spend in ways so subtle you probably don't know what's happening to you.

Or your wallet.

Retailers know how you'll approach a store, where you'll hesitate, how to affect your mood, how to pique your desires, how to play to your aspirations. Everything in a store, from lighting to floor color to music to how goods are displayed, is meant in some way to get you to not just shop, but spend.

PHOTOS: Think you're just browsing?

"It's like a Broadway musical," says Deborah Mitchell, a marketing expert at the University of Wisconsin. "Nothing was put into that musical that wasn't thought through. It's the same in a highly orchestrated retail environment."

At a Sony Style store, for instance, the subtle fragrance of vanilla and mandarin orange — designed exclusively for Sony — wafts down on shoppers, relaxing them and helping them believe that this is a very nice place to be.

ADVICE: Understanding why you're shopping can help curb it

Everything in the store is designed to encourage touch, from the silk wallpaper to the smooth maple wood cabinets to the etched-glass countertops. Products are displayed like museum pieces and set up for you to touch and try.

Once you touch something, Sony figures, you'll buy it.

At a new Home Depot in the Atlanta suburb of Buckhead, the entranceway lures shoppers in with an open floor plan so they get a better "vista" of the store.

Floor-to-ceiling racks of goods, long the signature of the warehouse store, are further back. Lower displays of expensive goods — riding lawn mowers, upscale porch furniture and a home design center for redecorating kitchen, bath and flooring — are clustered so they're visible from the front door.

At a JCPenney, a "decompression area" at the front of the store lets shoppers get acclimated and calm down from the noise in the mall or on the street. Three dressed mannequins offer a taste of the season's hot trends and set up a line of sight to the shopping ahead.

At a Macy's department store, salespeople stand about 10 feet inside the entrance, ready to spritz visitors with perfume.

All are ways to engage you in the store and draw you in.

The sound
Music has been used by retailers for decades as a way to identify their stores and affect a shopper's mood, to make you feel happy, nostalgic or relaxed so you linger. Think of '50s cocktail bar music in a Pottery Barn.

But retailers are becoming more sophisticated in how they use music. JCPenney has just finished installing a new system for its stores that allows certain music to be played at certain times of the day. It can "zone" music by demographics, playing more Latin music in stores where there's a higher Hispanic population — all controlled by headquarters in Plano, Texas.

"Most people know they are being influenced subliminally when they shop," says Bernadette Schleis, whose company studies consumer behavior. "They just may not realize how much."

To help you understand what's happening when you go shopping, here's a guide: How Retailers Lure You to Shop and Buy.

The aroma
Anyone who's walked into a mall has been enticed by the smell of cinnamon buns or chocolate chip cookies. Now, retailers such as Sony and shirtmaker Thomas Pink are developing "signature scents" that you smell only in their stores.

"Scent is so closely aligned with your emotions, it's so primitive," says David Van Epps, president of ScentAir, a Charlotte company that develops exclusive scents for businesses, including Sony. His firm's revenue, number of employees and output have tripled in the past two years, he says.

"Imagine you're trying to create the same level of brand loyalty that Harley-Davidson has when a guy is willing to tattoo his arm with the words 'Harley-Davidson.' That's what we're going for."

Other retailers might not have signature scents, but they use fragrance. Bloomingdale's uses different essences in different departments: baby powder in the baby store; suntan lotion in the bathing suit area; lilacs in lingerie; cinnamon and pine scent during the holiday season.

"We even fragranced their outside (display) windows in New York last year," says Van Epps. "They did a Phantom of the Opera display, and we fragranced it with rose."

Thomas Pink pipes the smell of clean, pressed shirts into its stores. The essence of lavender wafts out of L'Occitane skin-care stores.

And if brightly colored window displays aren't enough to lure you into a Williams-Sonoma kitchen store, the scents from frequent cooking demonstrations may. "It feels like you are in someone else's house," says Michelle Bogan, a retail consultant for Kurt Salmon Associates.

Sony decided to create its own scent for its Sony Style stores as one way to make the consumer electronics it sells less intimidating, particularly to women. "From research, we found that scent is closest to the brain and will evoke the most emotion, even faster than the eye," says Dennis Syracuse, senior vice president of consumer retail sales. "Our scent helps us create an environment like no other."

How retailers use scent can be tricky, though, Mitchell says.

"Not everyone agrees what smells good."

The entrance
The scent may have lured you near, but what's in the entrance is the spring on the trap. That's where you'll see some of the glitziest, most expensive stuff in the store — the stuff you wish you could buy.

"The key businesses that draw women — the high-volume, high-profit goods — are right up front: handbags, cosmetics, jewelry and sometimes, intimate apparel," says Dan Butler, a National Retail Federation vice president.

The entrance is important because it hints at what's inside that you must have. "We're trying to give her ideas right as she's walking into the store," says Karen Meskey-Wilson, vice president of store design for JCPenney.

Stores that cater to teens often pick one hot item and heavily promote it in their windows to increase demand, says consultant Bogan. Gap is doing that this fall with denim. The new "skinny" jeans style may push people to update their wardrobes, she says.

"The idea is that there is so much excitement about great new jeans that you'll want to go out and buy some, even if you don't need jeans," she says.

Others use a less-is-more tactic. Abercrombie & Fitch lures teens into its Ruehl stores by not having merchandise visible from the mall. You have to go into the store, which looks like a Greenwich Village apartment inside, to see if you like anything. Once inside, the retailer hopes its soft lighting, couches and books will make you want to stay and buy.

In department stores, merchants battle to get the best spots up front for their goods; those that sell the most get the prime positions. Cosmetics, which never go on sale, are among the most profitable items sold in department stores, Butler says. Free makeovers lure clients in and create a "sense of connection and obligation," says consumer psychologist Kit Yarrow.

"A nationally known makeup artist can sell $30,000 in cosmetics in one day," says Butler of the NRF.

The flow
How you as a shopper move in and around a store is not, really, up to you.

You're funneled from the store's entrance past its most expensive goods through a maze of aisles and into departments that are set up as stores-within-a-store. Then you find yourself on "the racetrack," an oval aisle that carries you around the entire building to get a look at everything.

It's the same at a department store or a home renovation store or, on a different scale, in a specialty retailer

Mini-displays called "trend stations" are parked in the middle of aisles to stop shoppers' progress and entice them to look and buy.

Lifestyle vignettes, such as carefully constructed mini-bedrooms or mini-bathrooms, make shoppers stop and look. Home Depot is using such vignettes in its Buckhead store to showcase its expanded kitchen and bathroom goods, including new vessel sinks and architectural designs for cabinets. The displays may be adopted in other new and renovated stores.

"Customers are so much more sophisticated in décor and wanting to take a risk in their home. So we're getting more sophisticated in our presentation," says Kim McKesson, senior vice president of store merchandising. "Our bathrooms aren't just knock-down white cabinets anymore."

If you like the look, whatever the look is, you can have it right away. All goods in the displays are within arm's reach.

"It's incredible to watch people as they walk up, see the mannequins and pick up the whole outfit," says Meskey-Wilson of JCPenney. "We're seeing great sell-through."

Sony Style has mini-living rooms set up to showcase what its 40-inch flat-panel TV would look like over a fireplace. "We've had customers bring in their architect and say, 'Re-create this in my house. I want the whole setup,' " says Syracuse of Sony.

Narrow aisles crammed with goods are going away.

"Twenty years ago, the founders wanted you to get lost in the store," spokesman David Sandor says of Home Depot's founding partners, Bernard Marcus and Arthur Blank. That's why Home Depots were laid out with long narrow aisles and no cut-across in the middle of the store.

Now, Home Depot is widening its aisles and lowering displays so customers can touch and feel products. JCPenney is "really weeding out the stuff in our stores," says Mike Boylson, chief marketing officer. The retailer used to have eight to 10 rows of merchandise in each area. As it opens new stores or renovates existing ones, it's cutting that to four.

"You don't have to go through a sea of racks anymore," says Meskey-Wilson.

Most consumers come into a store and head to the right, says consultant Bogan. That's why retailers, including Williams Sonoma, put high-priced impulse items to the right of the front door, such as a $150 wine opener.

"The No. 1 thing retailers are trying to do is to get people to make impulse purchases," says Yarrow, also a business professor at San Francisco's Golden Gate University.

And you thought you had a list and were going to stick to it.

Macy's shows lack of street sense regarding landmark Field's store

Sandra Jones
Chicago Tribune

CHICAGO -- Signs of Macy's approaching takeover of Marshall Field's on State Street are everywhere. Trouble is, some of them are the wrong signs.

New backlighted directional signs posted throughout the store near escalator banks make it clear that the new owner of Field's doesn't spend much time in Chicago.

The New York department store chain mistakenly labeled Wabash Avenue as "Wabash Street," Randolph Street as "Randolph Avenue" and Washington Street as "Washington Avenue."

The gaffe is striking, given that all Macy's signmakers had to do was to look above the doors on the first floor of the Field's flagship to locate the correct names, inscribed decades ago to help navigate the blockwide store.

Transplanted New Yorker Mike Doyle spotted the snafu walking through the store Wednesday morning and posted it on his Chicago Carless blog that afternoon.

"While that's not a critical faux pas, it's certainly embarrassing and not the best way to try to prove to Chicago locals that the Gotham retailer is taking its move to State Street seriously," Doyle wrote on his blog.

The Field's chain, including the State Street store, officially becomes Macy's on Sept. 9.

Macy's North spokeswoman Jennifer McNamara was unaware of the error when first contacted by the Chicago Tribune. After looking into the matter, she said: "We are addressing the signage. They will be pulled down, and we will be replacing those. Our plan is to get those up as soon as possible."

Macy's isn't the only organization to temporarily lose its way. The Chicago Transit Authority is spending $75,000 to reprint 3,000 maps on its trains after incorrect street names and a wrong phone number were discovered.

And in 2001, when Boeing Co. touted its headquarters move to Chicago with full-page newspaper ads, it inadvertently flipped the photo negative so the John Hancock Center was on the west side of North Michigan Avenue.

Macy's star dims in suburb

Chain's traditional symbol must be toned down on store it takes over in Lake Forest

Sandra Jones and Lisa Black
Chicago Tribune

CHICAGO -- Lake Forest, Ill. , the old money community that spurned a Costco store because it was afraid it might hurt its character, is mandating that Macy's dim its trademark bright red star when it takes over the historic Marshall Field's store in this North Shore suburb next month.

At the urging of its preservationists, the city-appointed Lake Forest Historic Preservation Commission approved last week a toned-down version of Macy's traditional logo on the outside of the 90-year-old Field's building anchoring the Market Square shopping court in the East Lake Forest historic district.

No tomato red star here. And no electric-powered letters that glow in the night. Oh, and the Field's signature green awnings must stay.

While Macy's owner Federated Department Stores Inc. has found few problems in other markets when it began mothballing longtime regional department store names to brand Macy's nationwide, the Chicago area isn't taking to change quite as quietly.

Field's fans have denounced the name change on Web sites while Federated has to keep the Field's nameplates and the famous clocks on the historic flagship State Street store, among other restrictions.

At the Lake Forest store the retailer is allowed to install a discreet bronze Macy's sign with raised polished letters on a dark background above the transom window at the store's entrance. The sign is less than a foot tall and about five feet long, not much bigger than the two existing, and prominent, "Marshall Field & Company" bronze plaques that must remain on the columns flanking the entryway.

The decision ends months of discussions over how to handle signage at the historic store as Federated converts the roughly 400 regional department stores around the nation, including Marshall Field's, on Sept. 9.

"It's a lot more subdued and in keeping with Market Square," said Virginia Munson, a member of the Lake Forest Historic Preservation Commission.

The broad-shouldered building with two-story Tuscan columns was designed by noted Chicago architect Howard Van Doren Shaw in 1916, housing the First National Bank, two utility companies and the YWCA.

Shaw was among the famous arts-and-craft style architects of the turn of the century, the widely influential English movement that attempted to re-establish the skills of craftsmanship threatened by mass production and industrialization. He designed many North Shore mansions, and Market Square is considered his masterpiece.

Field's took over the building at 682 Bank Lane in 1931, establishing the retailer's first branch store outside of its flagship on State Street in Chicago. Similar stores in suburban Evanston and Oak Park were built shortly after the Lake Forest store opened, but closed years ago. The Lake Forest store, with 61,000 square feet, remains the smallest outpost in Field's 61-store chain."We are working closely with the Lake Forest Preservation [Commission] to obtain the permits necessary to rebrand the exterior of our store to Macy's in Lake Forest," said Jennifer McNamara, a spokeswoman for Macy's North in Minneapolis. "Our plan is to replace the Marshall Field's sign on the store's exterior with a brass Macy's sign that is unique to our Lake Forest store."

The new Macy's sign is three-quarters smaller than the scripted Marshall Field's moniker that has adorned the store for decades. Macy's is required to keep the store's awnings dark green instead of Macy's black. And it must limit the inscription of the Macy's name to only two of the four awnings.

As for the famous red star, Macy's is permitted to use the star (as long as it's not red) on the bronze plaque, but not the awnings. Macy's typically puts its star before its name and uses a small star in lieu of an apostrophe. It must rely on a traditional apostrophe on the awnings, the city ordered.

The compromise placated the preservationists, who originally opposed any star.

"The sign has been so reduced in size that I think it needs a star," said Guy Berg, another commissioner.

Federated, with headquarters in New York and Cincinnati, hired Columbia, S.C.-based Image Resource Group Inc. to produce the Lake Forest signs, and many of the signs going up on stores nationwide. Most of the stores slated for conversion already have the lower case black Macy's letters, complete with its red star logo, on the buildings' exteriors, hidden under banners that read Marshall Field's until the Sept. 9 unveiling.

"Historically the city has taken the philosophy with respect to signage that it should provide direction rather than advertising purposes," said Peter Coutant, senior planner for Lake Forest. "This was really an opportunity to look at that sign and determine what was appropriate for the historic integrity of that building."

The leafy suburb put up a fight last year when Costco Wholesale Corp., the upscale warehouse club from Washington, attempted to build a store on the West Side of town.

Sign or no sign, some residents remain unhappy about the Macy's takeover.

Sally Spoehr, 75, a former Lake Bluff resident who moved to St. Augustine, Fla., said she stops at Marshall Field's in Lake Forest every year during her annual visit.

"When you came here the salesladies became your best friends," said Spoehr, who worked at the nearby library 20 years. "This store definitely has a lot of meaning."

"I would much rather I never saw Macy's," said Leslie Schwarzbach, 51, a Chicago native who has lived in Lake Forest nine years. She worked in a Marshall Field's stockroom at age 16, and carried her first credit card with Field's, she said.

"They sent me a Macy's card," Schwarzbach sniffed. "I don't think I'll be using it."

After Smooth Sales Talk, Stores Take Macy’s Name

By MICHAEL BARBARO

PORTLAND, Ore. — It was to be the most ambitious transition in the history of American retailing: To complete the merger of Federated and May, the nation’s largest department store companies, executives would abandon the names of 11 storied local chains, like Marshall Field’s in Chicago and Filene’s in Boston, and replace them with Macy’s, the very symbol of New York City.

And focus groups signaled that it could be a public relations disaster. “I left New York for a reason,” one consumer told Macy’s executives here.

But protests now seem remote as company officials prepare, in their words, to “Macyize” 400 stores on Sept. 9. And the reason has much to do with the diplomacy of one man who has crisscrossed the country, a chief executive cum politician, handing out money and promises, and calming local nerves as part of a campaign to neutralize opposition before it gathered strength.

Terry J. Lundgren, the chief executive of Macy’s parent company, Federated Department Stores, flew to Los Angeles, where he agreed, at the mayor’s request, to build a Macy’s at a mall in North Hollywood. In Chicago, he promised to resume local manufacturing of the famed Frango mints at Marshall Field’s. In St. Louis, he vowed to keep the downtown Famous-Barr store open, despite years of poor sales.

“When you are a company of our size, trying to make the changes we are making, you need a close relationship with local officials,” Mr. Lundgren said in an office at Macy’s Herald Square store in Manhattan. “You have to get off on the right foot.”

Any misstep would be costly. The merger Mr. Lundgren engineered in early 2005 was always a high-stakes bet that in a retail landscape dominated by big-box chains like Wal-Mart and specialty stores like J. Crew, consumers still needed department stores, and that they would warm to a retailer that wiped out century-old local brands.

The delicacy of the task may explain why Mr. Lundgren traveled here to painstakingly court Gerry Frank, whose family started Meier & Frank, a 149-year-old Oregon department store that Federated inherited when it bought May. Last year, Mr. Frank, the great-grandson of Meier & Frank’s founder, wrote a letter asking Mr. Lundgren, in no uncertain terms, not to tamper with the identity of the family’s department store. “I think I can speak for many, many Oregonians,” he wrote, “in asking that Federated maintain the Meier & Frank name.”

So, in the midst of the $11 billion takeover of May, Mr. Lundgren flew 2,500 miles to dine with Mr. Frank in Portland. Back at his office in New York, Mr. Lundgren exchanged flattering e-mail messages with him (“You are a Great Man and True Friend,” concluded one note from Mr. Lundgren. “Don’t be afraid to ask me or tell me anything,” read another.)

In a final flourish, Mr. Lundgren agreed to emblazon Mr. Frank’s family name on plaques outside the downtown Portland store after it became Macy’s.

“Today I would jump off a building for him,” Mr. Frank said of Mr. Lundgren.

It is a performance that Mr. Lundgren has repeated over and over, from Boston, where Macy’s will become an official department store sponsor of the Boston Red Sox, to St. Louis. “He called me on the phone several times, met me in person twice, then he had us up to New York,” said Francis G. Slay, the mayor of St. Louis, where the Famous-Barr chain is soon to become Macy’s. “Honestly, I was surprised that he gave so much personal attention to us.”

At the heart of Mr. Lundgren’s campaign is a simple insight into the politics of retailing: people care more about store symbols and traditions than the names behind them.

So instead of fretting over the loss of Hecht’s in Washington or Famous-Barr in St. Louis, Mr. Lundgren focused on the handful of rituals that matter to shoppers — the Christmas tree lighting ceremonies, the Santaland displays and the July 4 fireworks shows.

Even in Chicago, where 60,000 people signed an online petition to preserve the Marshall Field’s name, Mr. Lundgren has managed to win over detractors by emphasizing tradition, big and small. He has ensured, for example, that the downtown State Street store’s elaborate Christmas windows will remain untouched. He signed off on a plan to refurbish an abandoned express elevator that once carried shoppers directly to the store’s designer boutique, 28 Shop.

And he has seized on Frango mints, a cherished symbol of the State Street store and the source of a public relations fumble for Marshall Field’s earlier owner, Dayton Hudson, in the late 1990’s. Shortly after buying the chain, Dayton Hudson outsourced the mint’s production, laying off about 150 local workers and earning a very public rebuke from Mayor Richard M. Daley.

No wonder, perhaps, that at a luncheon in July that was expected to reveal long-simmering tensions over the Marshall Field’s name change, Mr. Lundgren announced that Macy’s would begin manufacturing Frango-mint-flavored cheesecakes in Chicago, a headline that dominated local newspapers the next day.

At the end of the lunch, members of the audience swarmed around the 54-year-old Mr. Lundgren, a silver-haired, meticulously groomed former Neiman Marcus executive. Several asked for his autograph.

“Very smooth,” was the verdict of one attendee, John S. Maxson, president of the Greater North Michigan Avenue Association, which represents 700 businesses in downtown Chicago. “Were this not handled as expertly as it has been, it could have been a big disaster. It has not been.”

Although Mr. Lundgren is credited with improving Federated’s financial performance, the company is by no means a runaway success. Before it bought May, it reported sluggish sales growth for several years. Bolstered in part by the merger, its earnings have improved; in the 12 months ended in January, revenue was $22.3 billion and profit was $6.5 billion.

All the more reason that Mr. Lundgren insists on sticking to the most disputed part of his plan, the name changes. The May department store chains, Federated executives maintain, have buried consumers under a blizzard of coupons and flustered them with crowded aisles of middle-brow fashions. As a result, the chains lost their relevance as purveyors of style and, with it, their ties to the community.

To prove the point, Mr. Lundgren tells a story. Soon after Federated disclosed that Marshall Field’s, an upscale Midwest department store, would lose its name, scores of shoppers wrote blistering letters to the company, with several threatening to cut up their Field’s charge cards.

Worried that the reaction might be widespread and hurt the chain’s sales, Mr. Lundgren asked the accounting department to pull the purchase records of the first 100 letter writers. “There was no activity,” he said. “Or incredibly little activity.”

“This is where the tension was coming from,” he continued. “There was a group of people who did not want a change. But do they like the merchandise in the store? Not according to their spending. In their letters, they talked about when they were a child. But nobody was talking in the present tense.”

The lesson was clear: changing the name was unlikely to hurt sales. In fact, it might improve them. Then there is the pure financial logic. The conversion to Macy’s will save Federated millions on advertising — one name is cheaper to market than 11 — and create one national brand with stronger negotiating power with clothing suppliers.

Mr. Lundgren said that power had already translated into exclusive product lines for Macy’s, which is trying to shake its reputation as a stodgy, midprice department store by carrying higher-priced, more fashionable brands. After the merger, Martha Stewart said she would develop an upscale furniture line for the chain — much to the chagrin of Kmart, which carries her Martha Stewart Everyday products — while the designer Elie Tahari agreed to create a collection of women’s clothing.

Mr. Lundgren’s commitment to stock more upscale merchandise has become a major selling point in his campaign to sell local political leaders on the Macy’s takeover. For years, officials in St. Louis, Washington and Portland have complained that May dumped cheap goods into their downtown stores.

“It was heartbreaking to watch,” said Mr. Frank, the Meier & Frank scion, who waged a bitter — and unsuccessful — battle to stop his family from selling the chain to May in the 1960’s. “Row after row of sales merchandise just turned people off.”

In their early conversations, Mr. Lundgren told Mr. Frank he would try to restore the luster to the Meier & Frank legacy, investing in elegant new store fixtures and more prestigious clothing brands. But Mr. Frank, at one time the chief of staff to the former Oregon Senator Mark O. Hatfield, a confidant of the Oregon governor and a columnist for the state’s largest newspaper, still opposed the name change.

Upsetting Mr. Frank could mean upsetting much of the Oregon political establishment, so Mr. Lundgren took his charm offensive on the road. He and his wife, Tina, attended a charity dinner in Mr. Frank’s honor in Portland, writing a donation check on the spot. He later invited Mr. Frank to lunch in New York City.

Mr. Lundgren also began exchanging frequent letters and e-mail messages with Mr. Frank, often venturing beyond business matters and speaking in strikingly personal terms. “Tina and I will be there for you if and when you ever need us,” concludes one e-mail message, which Mr. Frank shared with a reporter. “We both absolutely adore you.”

After Mr. Lundgren learned that a block in downtown Portland would be renamed “Meier & Frank Square,” he wrote: “Frankly (no pun intended), I would rather it be named Gerry Frank Square but we are all happy with the alternative. You are the very best.”

Mr. Lundgren has certainly let local leaders down, too. Shortly after Federated announced its plans to convert May stores into Macy’s, a team of political and business leaders from St Louis, where May is based, flew to New York to meet with Mr. Lundgren. In a conference room at Macy’s Herald Square store, they asked him to consider relocating Federated’s headquarters from Cincinnati to St. Louis, which would spare the city steep job losses. “I really appreciate this,” Mr. Lundgren recalled telling the group. “But we are not going to do this.”

In the end, the city lost several hundred jobs. But like their counterparts in Portland, Los Angeles and Philadelphia, St. Louis city leaders did not walk away empty-handed. Mr. Lundgren agreed to designate St. Louis the headquarters of Macy’s Midwest division, overseeing stores from Kansas City to New York, and to renovate the first floor of the city’s struggling downtown store. Mr. Lundgren delivered each piece of news himself, either in person or by phone.

To Mr. Slay, the mayor of St. Louis, the experience must have seemed strangely familiar. “That is,” he said, “a political approach.”

macy's marches on

NEW YORK (AFX) - An analyst said Tuesday Federated Department Stores Inc.'s integration of May Co. Stores into its Macy's brand is working so far.

Federated acquired May Co. last year. The company expects to finish converting the May Department Stores to Macy's by September, making Macy's the first nationwide department store chain.

"Although Federated's major re-branding strategy does not kick off until Sept. 9, we have received early indication that integration of the May stores to the new Macys format is performing well," wrote Merrill Lynch analyst Stacy Turnof in a research note Tuesday.

Merrill Lynch surveyed 50 stores, and found that 88 percent of sales associates were "pleased" with the changes and 74 percent of customers have been reacting "positively" to the changes.

"We believe that those customers still loyal to the May brand will change their minds over the next few months as improvements in merchandise and store shoppability become more obvious," Turnof wrote.

Macy's fashion center counts on comeback

Kenwood store loads up its men's department

By John Eckberg
Cincinnati Enquirer staff writer

Workplaces these days are awash with casual clothing and apparel - golf shirts on men and capri pants on women, clogs in summer and hiking boots in winter.

So why is Federated Department Stores Inc. bringing a building worth an estimated $10.2 million to loyal shoppers at its Macy's regional flagship at Kenwood Towne Centre in Cincinnati?

Though fashion may be on the wane at many offices and workplaces, Federated is banking on a big future for luxury goods for men.

The two-story, sprawling men's fashion center officially opens Wednesday - one of only two expanded stores among the 950 department stores owned by the Cincinnati-based retailer.

The men's fashion center - a second is in Atlanta - will take the Macy's here to 269,400 square feet. The space for women's clothing will be expanded as well.

"While we think we already have a great store here, a headquarters store, with the millions more going into the store, Kenwood really becomes the center for retail in the Cincinnati area," said Michael G. Krauter, president of Macy's Central division, a 76-store division based in Atlanta with annual sales of $2 billion.

While the upper floor will have traditional and contemporary suits and shoes from designers such as Michael Kors, Hugo Boss, Donald Trump, Calvin Klein and Tommy Hilfiger, the men's center will also have a broad assortment of Macy's private labels such as Tasso Elba and the new brand Material London, which are more profitable for the retailer.

The lower level will feature casual sportswear, including men's collections such as Tasso Golf, Joseph Abboud, Lacoste, Tommy Bahama, Polo and Nautica. The effort is supported by a region-wide direct-mailing.

The campaign puts a fashion DVD into the hands of the most dedicated Macy's shoppers.

The DVD offers fashion advice from style-setting celebrities including Trump, Sean "Diddy" Combs and Esquire magazine editor Nick Sullivan.

Men are the target of this effort because the times are changing when it comes to shopping for men's clothing, Krauter said.

In the past, women bought 70 percent of men's products. But in the last 20 years, a few things started to change: the increase in two-income households, a shortage of time for women, and the increasing tendency for men to become more discriminating about what they wore and how they wore it, Krauter said. The last four years have seen a more drastic change, and today men buy 75 percent of men's products.

"We've really seen since 9/11 that the customers' demand has changed," Krauter said. "Dress up has become more of a force and a bigger need of the customer. In the Internet era, there was a large boom in the casual trend, but as the economy pulled back, people started dressing up more."

Different demographics

The new initiative also reflects a changing customer base, according to Patrice Duker, manager of media relations at the International Council of Shopping Centers, a New York City-based trade association of 55,000 members.

The older department stores' customers grew up with department stores, Duker said.

"Today, there is a large group of Gen Y's, Gen Xers and Tweens who grew up with specialty stores like Abercrombie and Gap," Duker said. Wooing those shoppers can be a challenge for a major department store chain.

There comes a time, however, when a young man must put aside the cargo pants and T-shirts of youth to embrace their inner Windsor knot, and Duker said that demographic seam represents opportunity for Federated.

"I love that Men's Wearhouse commercial where they say that every man should have at least one good suit," said Mandy Putnam, vice president of Retail Forward Inc., a Columbus-based retail consulting firm.

"Then it dawned on me that what that commercial is really saying is that there are a ton of men out there who have probably never been fitted for a suit and don't know what to look for in a suit. They get a real job or are on the precipice of a real job and suddenly they have to figure out what to wear."

That's where the Macy's initiative at Kenwood can be a perfect fit, Krauter said. Catering to all lifestyles, the store will offer a merchandise mix that includes professional clothing, sportswear, casual wear and contemporary lines for men.

Women get attention, too

Women shoppers will not be neglected, either.

The relocated men's department will open up space for an expanded women's sportswear and accessories.

New lines are coming in the women's department as well: Bobbie Brown cosmetics, a shoe section that doubles in size, and handbags that include Michael Kors, Dooney & Burke, Kathy Van Zeeland, Vittadini, Calvin Klein and Betsey Johnson.

Kenwood Macy's will also have expanded Coach and Kate Spade shops - and for good reason. "The core customer for Macy's still is the repeat female customer," Krauter said.

Gary Ruffing, the retail consultant for BBK Inc., based in Southfield, Mich., predicted the Kenwood addition may be the prototype as Federated converts hundreds of former May Co. stores to the Macy's nameplate in the years to come.

Federated completed its $17 billion purchase of May Department Stores Co. in August, which means nameplates including Filene's, Foley's, Hecht's and Kauffmann's will disappear in the years to come.

"They'll be using this store as a laboratory to study customer trends and brands," Ruffing said.

"It wouldn't surprise me to see them take the best brands and approaches and roll it into other markets - nitpick the best of the mix. If the physical box is too small at those stores to be a Macy's, then yes, an expansion makes sense. But it takes a lot of money, and it takes time."

Federated looks to shop stores

By Alexander Coolidge
Cincinnati Post staff reporter

As Federated Department Stores looks to trim stores next year, analysts say several nontraditional rivals could end up taking over stores it plans to sell.

With the closure on Tuesday of its acquisition of St. Louis-based May Department Stores, the Macy's parent has doubled its size to become a $30 billion company with nearly 1,000 department stores. After the Christmas season, Federated's next move will be to shrink the chain by selling 75 overlapping stores at malls where it has too many locations.

Though analysts believe Federated's takeover of its largest rival leaves it a much stronger player, its retail segment is consolidating, which could translate into big boxes or other retailers' snapping up locations targeted for sale.

Many of the stores Federated is selling are at malls where the retailer has multiple stores. None of the stores targeted for divestiture are in Greater Cincinnati.

"Department store chains have come under immense pressure, I wouldn't be surprised if other retailers are looking at (Federated's) mall space," said Kim Picciola, an analyst with Morningstar in Chicago.

She predicted Target and Best Buy would join the likes of J.C. Penney to cherry pick the best of the stores being divested. She also said mall owners might purchase the locations to redevelop them for smaller tenants, such as restaurants or other specialty retailers.

But don't count out department store chains such as Penney's and Dillard's, said Phil Zahn, an analyst with Fitch Ratings in Chicago. He said Federated would welcome an old rival to its old turf, rather than risk a store remaining empty, which would hurt surviving stores.

"Everybody lives off each other's traffic," he said. "They don't want to see them stand empty because that would hurt their stores still open at those malls."

Company officials stressed they are holding off on sweeping changes as they prepare for the all-important Christmas shopping season. Federated said it continues to review its portfolio of stores for further divestiture.

Federated reiterated its pledge to minimize layoffs, which it said won't even start until March. The company has said it will offer all managers in good standing jobs, as well as many associates.

Close to 15,000 associates work at the 75 stores targeted for divestiture.

Federated also has said its plans to rename May's regional chains to Macy's won't happen until the fall of next year. The company did not provide any additional insight on whether it plans to rename the storied Marshall Field's chain.

all macy's, all the time

Aug. 4, 1959 -- opening day at Lenox Square, Atlanta, Georgia: Barbara Clark checks her pocketbook and prepares to enjoy the shopping center. The Rich's department store in the background is still open and will be renamed Macy's on March 6th as part of a major name change for Federated Department Stores' regional divisions (Photo courtesy Atlanta Journal-Constitution)

Federated Department Stores will officially convert its regional department stores (Bon-Macy’s, Burdines-Macy’s, Goldsmith’s-Macy, Rich’s-Macy’s and Lazarus-Macy’s) to the Macy’s nameplate effective March 6. The change will be marked in full-page ads in national and local newspapers and in broadcast advertising that will begin that day.

Special events related to the name change are planned for mid-March, including fireworks displays and the staging of mini-Macy’s parades in Atlanta, Seattle and other select cities.

In addition, a new customer-loyalty program is being introduced at all Macy’s divisions. In one of the largest credit-mailing programs ever, more than 14 million credit-card customers will receive new Macy’s credit cards and details about the “Star Rewards” loyalty program.

the federated name game (aka: welcome to macy's)

Well, they’ve done it again. Federated Department Stores has announced yet another round of name-changes for its regional department stores. Now, they’re no longer going to have regional identities as far as signage, bags, et cetera are concerned. They’re all going to be Macy’s or Bloomingdale’s, mostly the former. This comes on the heels of an awkward period in which the various chains shared their banner with Macy’s, creating such goofy monikers as Rich’s-Macy’s, Bon-Macy’s and Goldsmith’s-Macy’s, among others.

Don’t get me wrong. Macy’s is not a bad name, and virtually everyone who shops knows it. But the hyphenated names were a joke from the start. The old regionals were fast becoming more and more like each other. If I took an average person into Rich’s, for example, blindfolded them, teleported them to Macy’s and removed the blindfold, they would be hard-pressed to tell they were in a different store.

This whole name-changing thing reeks of goofiness. In cases where there were already Macy’s stores in a market with the former regionals, Macy’s did some high-profile exits, particularly in Atlanta, which lost Macy’s in several malls and downtown. And FDS assured customers of Rich’s, Lazarus and Burdines that things would only get better. Now, they announce that they plan to officially finish the job in converting its store base into a national chain when they’ve already done it through centralized buying and divisional consolidations, things that made operating costs cheaper, but did nothing for Joe and Jane Consumer.

They really could have saved themselves some sign and stationery money and done this in the first place.