Federated gave fourth-quarter 2002 earnings guidance, taking into account the store consolidations and closings, of $1.73 to $1.83 a share, and $3.15 to $3.25 for the full fiscal year 2002.
The company also gave guidance for 2003, projecting same-store sales at negative 1.5 percent to flat, and diluted earnings per share of $3 to $3.20.
This will be a big year for Bloomingdale’s. In addition to the Atlanta debut, a store in SoHo will open this fall, as well as two Bloomingdale’s home stores, in Oakbrook, Ill., and downtown Chicago. A total of 12 Federated department and home stores are slated to open this year, including a Bon Marche department store in Redmond, Wash., and a furniture gallery in Tacoma, Wash; a Macy’s furniture gallery on Staten Island, and two Macy’s in Hawaii. Federated operates 460 stores in 34 states, Guam and Puerto Rico.
Madison Riley, a principal of Kurt Salmon Associates, said Federated might take a wait-and-see approach to determine which name resonates more with consumers. The combined name could look cumbersome on the storefronts.
However, Riley said, "For now, the dual name makes sense, but it calls for further consumer research. Although Rich’s has history in Atlanta, the city is full of people from elsewhere, and Macy’s, as a New York store, might mean more to consumers now."
Riley said the move would consolidate stores that essentially draw the same customer. "Combining the two frees up real estate for Bloomingdale’s, which allows Federated to reach out for new customers," he said. "It’s a sound, strategic step, that allows [Federated] department stores to leverage the retail model that is having difficulties now."
"It’s about time they consolidated Rich’s and Macy’s, because they’ve been basically the same store for a long time," said Brenda Gilpatrick, president of Gilpatrick Marketing Group, an Atlanta-based retail consulting firm. "Rich’s still has strength in its name, and it used to be known as the hometown store, with great service, but now it’s just like Macy’s. Bloomingdale’s will be a great addition to the local retail scene, competing with Neiman Marcus, Saks and Nordstrom," she said. "It will give Lenox Square and Perimeter Mall a fabulous competitive edge."