Macy's Takeover: Not going as planned

[Tannerman]

Many folks let me know recently that I came down rather hard on Macy's in my State Street Showdown that I put together for Christmas 2007. I'm sure a non-Chicagoan might have a hard time understanding the localized passion for Marshall Field's.

While we have discussed the economic challenges in today's retail environment, I continue to argue that you can't just slap a new name on an established brand and expect it to do well, especially when the new name is a step down in the realm of quality. Believe it or not, people DO notice! [Insert typical Steve Tanner reference comparing Disneyland to Disney's California Adventure here ]

But hey, don't take my word for it. Let's take a look at what's been happening since the Christmas season wrapped up. Overall, Macy's same store December sales were down 7.9% when compared to 2006. Note that this coincides with Macy's new "national" presence ever since acquiring The May Company, which included Marshall Field's. Macy's is closing a former-Marshall Field's location in Lake Forest, which is a northern suburb of Chicago. Even when it was a Field's, it was a rather small store, but with the loss of customers seemingly associated with the ownership/name change, it couldn't hang on. 24 jobs, gone. Then, two weeks ago Macy's announced that they were closing 9 other stores, many in the Midwest. 900 more jobs, gone.

On top of that, in a move to cut further costs, they are closing all the Marketplace food operations, which provided snacks, sandwiches, wine, and other food options in the stores (the one at State Street remains open, however). But as some have noted, is it really a good idea to remove some of the unique elements that actually KEPT folks in your store for an extended period of time?

Now we hear that the Macy's North division, which consists of all the former Marshall Field's stores in the Midwest, is going to layoff 271 folks, about 100 of which are in Chicago (70 in Detroit and 100 in the Minneapolis area). Macy's blames the poor holiday sales for the layoffs.

Ah, but you know who else they are cutting? The Senior Manager of Window Displays, Amy Meadows, has been let go after 25 years. She was the person in charge of designing the windows as well as the look on the Great Tree in the Walnut Room. But that's OK, because a Macy's spokeswoman said, "We have a talented visual team who will decorate our store windows and continue the time-honored tradition." Um, yeah.

Remember, Macy's whole point in purchasing other stores and renaming them was so they could leverage a national brand and reinvent the retail industry (their words, not mine). Given the financials, I don't think it's working out that way. Sounds like CEO Terry Lundgren would rather run everything into the ground instead of admitting that he was wrong.

It's OK, Terry, the folks at TimeWarner have long since admitted that the whole AOL-Time Warner thing was a big mistake as well. Heck, even Disney admitted that California Adventure was a bad idea... but it took a new CEO to set things straight.

Catch my drift?

[Tannerman]

Macy's sales down at Christmastime:

Macy's, Inc. Combined November-December Same-Store Sales Down 1.1%

December Same-Store Sales Fall 7.9% Following a 13.4% Increase in November; Combined November-December is Consistent with 4Q Same-Store Sales Guidance

CINCINNATI--(BUSINESS WIRE)--Jan. 10, 2008--Macy's, Inc. (NYSE:M) today reported total sales of $4.624 billion for the five weeks ended Jan. 5, 2008, a decrease of 7.4 percent compared to total sales of $4.995 billion in the five weeks ended Dec. 30, 2006. On a same-store basis, Macy's, Inc. sales were down 7.9 percent in December. This is below guidance for December same-store sales to be down between 4 and 7 percent.

For the November-December period combined, Macy's, Inc.'s same-store sales were down 1.1 percent. This is consistent with guidance for the company's fourth quarter same-store sales to be in the range of down 2 percent to up 1 percent.

For the year to date, Macy's, Inc. sales totaled $25.051 billion, down 0.5 percent from total sales of $25.188 billion in the first 48 weeks of 2006. On a same-store basis, Macy's, Inc.'s year-to-date sales were down 1.0 percent.

"Given the calendar shift between November and December, we noted previously that the two-month holiday selling period needed to be viewed together rather than each month individually," said Terry J. Lundgren, Macy's, Inc. chairman, president and chief executive officer. "After a strong November, we had hoped that a more positive sales trend would continue through December. But macroeconomic trends led customers to spend cautiously for the holiday. That said, we remain on track to be within our guidance for same-store sales in the fourth quarter, albeit at the low end of the range of down 2 percent to up 1 percent."

The company expects January same-store sales to be down by 4 to 6 percent compared with last year.

Macy's, Inc., with corporate offices in Cincinnati and New York, is one of the nation's premier retailers, with fiscal 2006 sales of $27 billion. The company operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy's and Bloomingdale's. The company also operates macys.com, bloomingdales.com and Bloomingdale's By Mail. Prior to June 1, 2007, Macy's, Inc. was known as Federated Department Stores, Inc.

Source

[Tannerman]

Lake Forest, IL, store closing:

Lake Forest Macy's to close
Last day Jan. 20

January 3, 2008
BY LONG HWA-SHU

The Macy's in downtown Lake Forest is closing its doors.

A clearance sale is in progress with merchandise marked off as much as 30 percent. The last day is Sunday, Jan. 20.

Formerly a Marshall Field's store, the building is the centerpiece in Market Square. Across the country, Macy's Inc. will close nine stores because of disappointing sales.

The closing of the store has long been expected. At 16,000 square feet, it is one of the smallest stores in the Macy chain of 850 stores. Most of its stores are about 250,000 square feet. In Lake County, Macy's other store is at Westfield Shoppingtown at Hawthorn in Vernon Hills.

While the closing was expected, many former loyal Marhshall Field's customers appear to blame the change of store ownership. The Field's name commanded respect and loyalty in the Chicago area.

Nancy J. Thorner of Lake Bluff is one of them.

The name change, she contended, "angered many Field's shoppers across Chicagoland." Some former loyal Field's customers, in fact, boycotted the stores. Others cancelled their credit cards.

Terry Lundgren, Macy's chairman and chief executive officer, called the pending closings necessary.

"While the decision to close stores is difficult, it is necessary that we do so selectively in locations with declining sales and where we have been unable to identify sufficient growth opportunities," he said.

Among stores slated to close include three in Ohio; one each in Indianapolis; Oklahoma City; Lake Charles, La.; Dallas and Houston; and one in Riverdale, Utah.

The closing of the Lake Forest store will affect 24 full- and part-time workers. Macy's has said it will try to place at other Chicago area stores.

A new tenant for the building is not known, although Chicago-based Broadacre Management Co., which owns most of the buildings at the square, said many retailers would be interested in the space.

Broadacre officials could not be reached for comment as to the prospective tenant. They have called the building "a jewel box."

Source

[Tannerman]

Macy's closing 9 stores:

Macy's closing 9 stores

December 29, 2007

Macy's Inc., the owner of its namesake chain and Bloomingdale's, is closing nine stores with inadequate sales and said it will eliminate 899 jobs.

Macy's will shut locations in Akron, Canton and North Randall, Ohio; Lake Charles, La.; Riverdale, Utah; Indianapolis; Oklahoma City; Houston and Dallas. Final clearance sales will begin in the next few weeks, the retailer said Friday in a statement.

The company will operate 815 Macy's after shuttering the stores, all of which are locations the chain acquired when it bought May Department Stores Co. in 2005, spokesman Jim Sluzewski said. The retailer's sales growth has been hurt by the former May stores, which were converted to the Macy's name last year, according to analysts.

"They are certainly muddling through, but not muddling through very well," Patricia Edwards, who helps manage $13.4 billion at Wentworth, Hauser & Violich in Seattle, said of the merger. "It's a big bite to chew off, and these customers are used to different things."

Source

[Tannerman]

Macy's cutting 271 jobs:

Macy's to cut 271 jobs in northern unit
Layoffs come after December sales lag

By Sandra M. Jones
Tribune staff reporter
6:10 AM CST, January 12, 2008

In the wake of a disappointing holiday selling season, Macy's Inc. disclosed plans to eliminate 271 jobs at its northern division, discontinue most of its wine business and shutter several food operations.

The job cuts account for about 1.5 percent of Macy's North's total workforce and include store-level and corporate posts in areas such as alterations, food, marketing, visual and finance, the company said.

The layoffs take effect in March and are spread across the division: about 100 in the Chicago metro area, 70 in Detroit and 100 in the Minneapolis region. Of those jobs, about 50 are at the Minneapolis headquarters of Macy's North, formerly Marshall Field's.

The announcement comes one day after Macy's posted a 7.9 percent December sales decline at stores open at least a year, worse than the 4 percent to 7 percent decline the company had forecast.

For the combined period of November and December, a better gauge of the holiday season, same-store sales fell 1.1 percent from the same period a year ago. The company expects January same-store sales to be down by 4 percent to 6 percent compared with last year.

Macy's has struggled with sagging sales since converting hundreds of regional department stores, including Marshall Field's, to the Macy's nameplate in September 2006.

Macy's Chairman and Chief Executive Terry Lundgren has said he wants to revive the department-store model by consolidating operations and buying power under one national brand. But the firm has been slow to win over shoppers, especially in Chicago, where Field's roots are deep.

"The business isn't performing so they've got to cut costs to be aligned with revenue," said Steven Platt, director of Platt Retail Institute, an industry think tank in Hinsdale. "It's how you have to run a business, particularly a retail business. The bigger problem is what does it do to the stores. That's the obvious risk, if they save nickels here and dimes there and totally denigrate the customer experience."

The department-store operator closed food operations on Thursday at its stores in Bolingbrook, Oak Brook, Aurora and Vernon Hills. It plans to shut its in-store wine shops at all stores except for the State Street flagship in Chicago.

There are no sales positions eliminated in this wave of layoffs, said Andrea Schwartz, a Chicago-based Macy's spokeswoman. Some jobs are related to the shuttered food operations and some are back-office posts. She declined to be more specific.

Macy's said in a prepared statement that the job cuts reflect efforts "to increase efficiency, improve profitability and stimulate growth."

Macy's has been shrinking the former Field's operation for more than year, offering packages that enticed high-paid, long-term sales people to leave, eliminating scores of distribution jobs and shuttering the historic Lake Forest store.

Several Wall Street analysts predict that Macy's eventually may be forced to dismantle its regional structure and consolidate overhead costs under one corporate roof.

Macy's doubled its size to more than 800 stores in 2005 when it bought St. Louis-based May Department Store Co. for $11 billion, but it kept seven regional divisions, a holdover from the more than dozen regional chains it bought. Macy's even has two headquarters: New York and Cincinnati.

"Our prediction is for Macy's to potentially consolidate more divisions as well as close additional stores," wrote Citigroup Global Markets Inc. analyst Deborah L. Weinswig in a report Thursday. She added that it makes sense, for example, to combine Macy's North in Minneapolis with Macy's Midwest in St. Louis or Macy's Northwest in Seattle with Macy's West in San Francisco.

Last month, Macy's closed nine underperforming stores affecting 900 workers. None of the stores were in Illinois.

Source

[Tannerman]

Christmas windows lady shown the door:

Macy's shows window guru the door

January 14, 2008
BY SANDRA GUY AND ESTHER J. CEPEDA, Staff Reporters

For 25 years, Amy Meadows designed the magical masterpieces seen inside the frosty windows of what used to be Marshall Field's flagship State Street store. She'd also make sure every twinkling star on the Great Tree in the store's famed Walnut Room was just right.

But not anymore.

Now that Christmas is over and disappointing holiday sales have been tallied, Macy's Inc. put on its Grinch costume and announced Friday it will eliminate 100 jobs in Chicago, including Meadows'.

Meadows, senior manager of window displays, started her career at Marshall Field's as a window designer and eventually came to mastermind the creation of all of the store's displays and the Great Tree.

She could not be reached for comment.

The layoffs take effect in March and affect about 100 workers in the Chicago area, 70 in Detroit and 100 in the Minneapolis region. On Thursday, Macy's Inc. closed food operations at its stores in Bolingbrook, Oak Brook, Aurora and Vernon Hills and plans to shut its in-store wine shops at all stores except the State Street location.

Macy's Inc. did not comment on dismissing Meadows, an employee with 25 years of institutional memory, but a spokeswoman said, "We have a talented visual team who will decorate our store windows and continue the time-honored tradition."

Since the changeover in September 2006, Macy's has been struggling to win the hearts of Chicago shoppers loyal to Marshall Field's, which was, to some, synonymous with warm Christmas memories.

"It's a loss to our city," said Jim McKay, co-organizer at fieldsfans chicago.org, a grass-roots group that has been an outspoken critic of Macy's, upon hearing of Meadows' dismissal. "It used to be a one-of-a-kind store, and now it's one of 800, and that's a detriment to our city."

Source

[FernLaplante]

Macy's is the perfect example of a company that sees dollar signs and doesn't care about it customers. The next thing we know all the Macy's will be closed and there will be NO department stores left.

When Macy's bought the May company they changed the name of a beloved department store in Pittsburgh from Kaufmann's to Macy's as well. Similar to the Marshall Field's example here, Pittsburghers were furious with the name change as the flagship Kaufmann's in downtown Pittsburgh has been a staple in the city since it was founded in 1871 by Edgar Kaufmann - who later commissioned Frank Lloyd Wright to build Fallingwater in Bear Run Pa.

Most PGHers refuse to call it Macy's and still refer to the main store downtown by the name it had for 135 years.

I am sure there are stories like this in every city.

[Tannerman]

Originally Posted by FernLaplante

When Macy's bought the May company they changed the name of a beloved department store in Pittsburgh from Kaufmann's to Macy's as well.

I wrote about many of the company brands they bowled over on my now-retired Old Orchard Observer blog. Here's a rundown

[FernLaplante]

*sigh*

I miss Kaufmann's (and Horne's and Gimbles)

[Kidologist]

you linked this in Twitter, so what is the 2008 update?