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"Rich’s is not going away," said Sue Kronick, group president at Federated, during a press conference in Atlanta. "It will continue to be run by RLG," meaning Rich’s/Lazarus/Goldsmith’s division. "Neither entity is winning or losing with this move. Rich’s-Macy’s is a new brand that will incorporate the best of both. Rich’s is known for hometown values and Macy’s has a national expertise."
More specifically, Ron Klein, Rich’s ceo, said, "Macy’s is known for The Cellar, its housewares, and has more extensive departments in women’s shoes and jewelry areas than Rich’s," he said. "Now those areas will expand in the combined stores."
Rich’s brings well-developed tabletop and furniture categories to the new combined stores, added Kronick.
Federated had a disappointing Christmas season and has been squeezed by lower- and higher-priced competitors, particularly Kohl’s, which entered the Atlanta market about two years ago. In addition, Macy’s and Rich’s have been competing head-on, so it’s hoped that they begin to work together and build on their strengths, rather than fight each other. Last year, Rich’s performance ranked in the middle of the Federated pack. Burdines did the best, followed by The Bon, Bloomingdale’s, then Rich’s, while Macy’s trailed, though the performances were close.
James M. Zimmerman, Federated’s chairman and chief executive, said the capital investment in the Atlanta market, including the Bloomingdale’s conversions, is expected to total more than $75 million in the next 12 months. It will be funded within Federated’s $650 million capital budget for 2003.
"Atlanta is an important and unique market for us — the only one with such an extensive concentration of both Rich’s and Macy’s stores competing head-to-head," Zimmerman said in a statement. "By combining the strong regional expertise of Rich’s with the powerful Macy’s national brand, we will be giving Rich’s-Macy’s customers the best selection of fashion and value under one umbrella, while ensuring that we maintain community ties and preserve the special traditions of each."