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NEW YORK — Federated Department Stores has finally made it official.
Michael Steinberg, one of the nation's top merchants, is retiring as chairman and chief executive officer of the Macy's West division on Feb. 1 and will be succeeded by Jeremiah J. Sullivan.
Robert Mettler will become Macy's West president and chief operating officer, taking Sullivan's titles, and will serve as chief merchant.
The announcement Wednesday confirmed reports in WWD in the past two months, regarding the new top lineup at Macy's West.
Steinberg, who is 71, will become a special consultant to Terry Lundgren, president and chief merchandising officer of Federated. The nature of Steinberg's projects will be determined.
The 100-unit, San Francisco-based Macy's West division is expected to surpass $4 billion in sales this year. It is considered one of the most fashionable department stores in the country.
Among the Federated divisions, Macy's West this year is the second-most profitable, next to Burdines, based in Miami, according to sources.
Its strong performance is largely credited to Steinberg, a tireless worker who came out of retirement from Foley's in 1993 to head up Macy's West and pull it together during the chaotic bankruptcy period of its then parent R.H. Macy & Co. Macy's went bankrupt in 1992 and was bought by Federated in 1994.
For the new team, the challenge will be to preserve Macy's status as one of the nation's more fashionable department stores and its momentum as a top performer at Fed-eraed. The Cincinnati-based Federated also operates Macy's East, Stern's, The Bon Marche, Rich's, Lazarus, Fingerhut, Bloomingdale's By Mail, Macy's By Mail and Macys.com.
To recruit Mettler, 59, formerly Sears, Roebuck's president of merchandising for full-line stores, Federated had to negotiate to get him out of a non-compete severance arrangement with Sears. Mettler left Sears in September, amid a management shakeup and disappointing results at the stores.
However, Lundgren said Wednesday, "It wasn't that tricky because Macy's West is perhaps, outside of Bloomingdale's, our most upscale division. While we compete with all retailers, [Sears and Macy's West] have very different customer bases. It's not that complicated."
Lundgren would not comment what Federated conceded to Sears in return for freeing up Mettler. Typically in these situations, a retailer would promise not to tap the executive ranks of the other for a year or two.
Lundgren characterized Macy's West as "a leader in multiple categories of performance, not just within Federated, but within the department store arena.
"I think that Mike and Jerry Sullivan and Rudy Borneo [vice chairman] lead a very strong team that has consistently delivered on all fronts. There's a consistency of service from door to door and high standards of visual presentation and housekeeping, above many of our divisions."
He added: "I get on a plane frequently, and pop into the stores unannounced, and Macy's West does the best job at merchandising in an exciting and well-maintained way.
"Mike has been a tireless leader. He puts in tremendous hours. He's constantly in our stores. Keeping that pace and keeping those standards that high will be a challenge because of his tremendous energy. But you've got another very strong, meticulous merchant in Bob Mettler."
Steinberg cited other challenges. "This is a very competitive and aggressively promotional business," he said. "We all should be less promotional. We can do a better job with fashion, newness, novelty, making retailing more interesting. The customer has so many choices."
However, Steinberg said department stores have been "unjustly maligned," adding, "We still offer an ambiance not duplicated elsewhere, and have the cache to be able to offer a broad array of merchandise in a much better environment."
Mettler will have all the merchants and marketing executives report to him. He will report to Sullivan, 60, a Federated veteran and president of Macy's West since 1995 serving as the division's chief operations and financial executive. It's Sullivan's first ceo spot at Federated, but he has held president posts at I. Magnin, Filene's and Lazarus, as well as Macy's West. Borneo continues as vice chairman.
Having an operations executive leading a division is not unprecedented for Federated. At The Bon Marche, based in Seattle, Dan Edelman, ceo, is a financial and operations executive, while Tim Adams serves as president and chief merchant.