By  on January 10, 1994

NEW YORK -- Retailers are swarming around the beleaguered R.H. Macy & Co., looking to pick up pieces of the chain or, in at least one case, just take it all.

Federated Department Stores' announcement last week that it had purchased a large claim against R.H. Macy & Co. as the first step in a planned takeover set off waves of speculation in the retail industry.

On Friday, following a board meeting, Macy's low-key, but intense, chairman and chief executive, Myron E. Ullman, got on the chain's video conferencing system and told his legions around the country that the chain is getting stronger and that he's confident Macy's will not be broken apart.

December's EBITDA, he said, was 30 percent higher than it was the same month a year ago, increasing to $266 million, compared to $205 million. Cash in the bank was $40 million higher than forecast for this period in time, at $275 million.

But is the company strong enough to fend off its unwanted suitors and thereby determine its own fate? WWD examines what might happen if:

  • Federated is successful in taking over the New York-based giant.

  • Dillard Department Stores enters the bidding for pieces or all of Macy's.

  • May Department Stores takes an active role in plucking Macy divisions that fit into its plans.

... Federated Wins

If Federated Department Stores succeeds in taking over R.H. Macy & Co., it would probably sell some stores, close some others and eliminate duplication, especially at the corporate level.

On these points, there is general agreement among observers. They also say that a combination of Federated and Macy's would be stronger than either on its own.

But that's where unanimity ends.

Some say that Federated is determined in its efforts to acquire Macy's and has a good shot at succeeding.Others see the whole plan as a move designed to persuade Macy's to sell Bullocks back to Federated. Macy's bought Bullock's from Federated back in 1988 as part of a settlement of a bidding war between Robert Campeau and the then-chairman of Macy's, Edward Finkelstein, for Federated. Campeau won and led Federated into Chapter 11 in 1990.

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