In one of the biggest reshapings of the U.S. department store landscape in years, Federated Department Stores Inc. said Monday that it will convert all of its units — save Bloomingdale’s — to the Macy’s nameplate in January 2005, eliminating such venerable retail logos as Rich’s, founded in 1867; Lazarus, since 1851; Burdines, 1898, and The Bon Marche, which dates back to 1890.
The 184 stores converting to Macy’s will join the 239 department stores already operating under that name in the U.S., as well as in Guam and Puerto Rico.
The move is primarily geared toward strengthening marketing and cutting some of those costs. But the rebranding should give Macy’s significant added muscle in buying, building exclusive merchandising arrangements with vendors and private label development. Federated’s private brands include labels such as I.N.C., Tasso Elba, the Hotel Collection, Alfani and Charter Club, already sold in different divisions.
The Macy’s switchover will not lead to any layoffs or organizational changes, and the fashion buying would continue to be done regionally to ensure the assortments are tailored to regional and climactic differences, said Terry Lundgren, Federated’s chairman and chief executive. He added that each division still has to execute its own marketing calendars, requiring regional teams to stay in place.
Federated already has centralized its home buying operation by assembling an organization of just fewer than 300 people at 11 Penn Plaza, which buys home products for all of Federated stores, except Bloomingdale’s.
“There are unique reasons for doing this in home,” Lundgren said. “The product is not differentiated in the home. It’s the same product in Macy’s and Rich’s and Burdines. Basically, we buy the same product and we were competing against national chains in home furnishings. The only way to have differentiated product is to step up to the plate and buy a substantial amount of units, so it works favorably for the manufacturer, and retailer, as well.”