By  on September 14, 2006

Call the conversion of 400 May stores to Macy's daring or risky. But don't call it the homogenization of malls. It makes Terry Lundgren bristle.

"This is not a cookie-cutter deal," said Lundgren, the chairman, chief executive and president of Federated Department Stores, which orchestrated the nameplate change on Saturday following Federated's $17 billion acquisition of May last year. "We have tailored the assortments to the individual locations."

Though there are now two Macy's in 160 or so malls, they are not twins. They generally offer different categories; mall mates could be a Macy's home store and a Macy's fashion store. But the proliferation of the nameplate across the nation has heightened consumer concerns about a deepening sea of merchandise sameness.

Lundgren reacts differently, saying the merger "gives us an opportunity to use our planning and distribution organization and our regional buying offices to our advantage." Among national department stores, "we are the only ones who have these regional buying, planning, distribution and marketing organizations. That's a very unique competitive advantage."

The competition, in particular Kohl's and J.C. Penney, have gone on record stating that they expect to capture more shoppers with the merger. Asked if he was worried about consumers defecting to non-Federated stores, Lundgren said, "We have always had a great deal of competition and I respect our competitors, both higher- and lower-end. But, ultimately, it is about the brands and the quality of the brands we carry, like Ralph Lauren, Coach, or the uniqueness of MAC cosmetics." Kohl's is signing exclusive deals for private labels, following Federated's lead, but Lundgren, expressing some cynicism about some of these deals, said, "It's not just about having names slapped on a particular garment."

At this point, less than a week since the Filene's, Foley's, Marshall Field's and other May nameplates were replaced by Macy's signs, all the former May doors have been touched to some degree by Federated's private label and "re-invent" store experience programs, Lundgren said. He cited "a huge capital project" for upgrading lighting, widening aisles, removing some fixtures from floors and upgrading fitting rooms and restrooms. "There's been a lot of change, too, in between the merchandise. I would say that the customer would say we are more shopable now. We have really worked hard to change the shopping environment. We've got clearer aisles with more open vistas, better clarity of positioning of the brands and, in certain areas of the stores, we come across with less goods piled up on the racks."

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