More Muscle for Macy’s: Federated Rebranding Builds $13.5B Chain

Federated Department Stores plans to change all its regional units to the Macy’s nameplate, leaving it with only Macy’s and Bloomingdale’s...

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But Lundgren said that the fashion buying would not be centralized. “We buy apparel products very differently by market.” It’s something that traditionally has distinguished Federated from other department stores, and that “represents a clear, competitive advantage for us,” Lundgren added.

Federated has a track record of converting regional operations into Macy’s. During the past two decades, Bamberger’s, Abraham & Straus and, more recently, Stern’s, all were largely changed to Macy’s, with a few of those sites becoming Bloomingdale’s. With its 423 units, Macy’s is still far smaller than the nation’s three largest department store chains, Sears, Roebuck, with 870 department stores; J.C. Penney, with more than 1,000, and May Department Stores, with 497.

About a year-and-a-half ago, Federated started to phase in hyphenated logos in its three regional operations, beginning with the Rich’s/Lazarus/Goldsmith’s division based in Atlanta, then the Seattle-based Bon Marche division a year ago and the Miami-based Burdines chain six months ago. Currently, the stores are called Rich’s-Macy’s, Burdines-Macy’s, Lazarus-Macy’s, Goldsmith’s-Macy’s and The Bon-Macy’s. Those nameplate extensions, while cumbersome, were geared to get shoppers around the country accustomed to the Macy’s name and ease into the transition.

While those changes have been widely regarded as a prelude to dropping the regional names entirely in favor of Macy’s, which was founded in 1858, Lundgren said Monday, “This absolutely was not planned.

“In fact, I said from the very beginning that I would let the customers decide. This was done through research and not arbitrary decision-making. We hired research agencies to help us to talk to consumers about this, and tested for a year-and-a-half” in the Atlanta, Memphis, Florida and Seattle markets.

“There was a point where I was strongly considering that the hyphen strategy would be enough, and take us the distance and, frankly, we had some reaction,” Lundgren said. “There was a percentage that was against and a percentage that was supportive.

“But we later went back into those markets and retested the name change. In this case, the very large percentage was either neutral or in favor of the idea.”
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