Federated Stores to Reorganize Into 7 Divisions
Federated Department Stores Inc. said it would operate through seven geographic divisions after Feb. 1, 2006, in the wake of its acquisition of May Department Stores Co.
California will be organized into Macy’s West. The division will be based in San Francisco and will operate 187 units in six states. It will be responsible for the absorption of 44 Robinsons-May stores in California, Nevada and Arizona and 17 Foley’s stores in Colorado, New Mexico and Texas. All will be renamed Macy’s by Fall 2006.
The other divisions include Macy’s East, based in New York; Macy’s Florida, based in Miami; Macy’s Midwest, based in St. Louis; and Macy’s North, based in Minneapolis. The northern division will be responsible for converting all 62 Marshall Field’s stores into Macy’s by Fall 2006.
Macy’s Northwest, based in Seattle, will absorb 20 Meier & Frank stores, and Macy’s South, based in Atlanta, will absorb 59 Foley’s stores and 33 Hecht’s stores in the region.
Federated announced on Sept. 20 that it would convert four Robinsons- May sites to Bloomingdale’s, including stores in Fashion Valley Center in San Diego and South Coast Plaza in Costa Mesa, Calif.
The news of the reorganization comes on the heels of an announcement that 1,100 Robinsons-May positions would be cut in North Hollywood as Federated completes its $11 billion purchase of May Co. In all, Federated will eliminate more than 6,000 positions this Spring as it phases out May Co. operations in Los Angeles, Boston, Houston and Arlington ,Va., and the May Co.’s corporate headquarters in St. Louis.
The company will run 850 Macy’s and 40 Bloomingdale’s nationally. Federated said it will “study” the Lord & Taylor division and make a decision about its future by the end of the 2005 fiscal year. The company also stated that it intended to divest the Bridal Group division it acquired from May Co. in 2006. These stores include David’s Bridal, After Hours Formalwear and Priscilla of Boston.
The sometimes-painful transition, marked by job losses and the absorption of cherished department-store names such as Marshall Field’s, will ultimately benefit Federated, according to Alan Siegel, chairman of retail consultants Siegel & Gale, based in New York and Los Angeles.
“To survive as a department store in the face of severe competition from Wal-Mart, Target and Kohl’s, who feature low prices, and highend specialty stores like Nordstrom, Neiman Marcus, and Bergdorf Goodman, Federated has to create one umbrella brand to realize significant efficiencies from centralized buying and a national advertising campaign,” Siegel said.
Although changing the nameplates of stores is scheduled to happen by Fall 2006, Federated expected all of its stores to be carrying Macy’s-brand merchandise by the third quarter of 2006.
This merchandise will include two May Co. private brands: Karen Scott and John Ashford. Federated said it would maintain the credit systems of its acquisitions for the immediate future.
The California Robinsons-May stores that will join the new Macy’s West division include the locations at the Brea Mall, Baldwin Hills Crenshaw Plaza, Eagle Rock Plaza, Fashion Island, South Bay Galleria, Galleria at Tyler, the Imperial Valley Mall, Inland Center, Irvine Spectrum Center, Lakewood Center Mall, Mainplace/Santa Ana, Montclair Plaza, the Shops at Mission Viejo, Simi Valley Town Center and Westside Pavilion. —Andrew Asch
