By  on February 4, 2005

NEW YORK — The name of a nostalgic Oleg Cassini display in Lord & Taylor’s Fifth Avenue windows, “Now & Then: 50 Years of Fashion,” hasn’t been lost on retail observers, who said it epitomizes many of the problems of its long-suffering parent, May Department Stores Co.

While L&T has made significant efforts over the last 18 months to modernize and capture a younger customer, such a promotion of a longterm, established designer sends a mixed message that is borne out inside the store. On the second floor, where contemporary collections are sold, music blares and racks of HotPants, ponchos, shrugs and other “hot trends” are reduced by 50 to 80 percent. And customers appear to be in their 50s and 60s, far from the target market for such merchandise.

The floor above, where designer collections are housed and Cassini’s “couture” dresses hang in a circle, has a nostalgic feeling with gray carpets and sales associates speaking in hushed tones. And while the chain is trying to attract customers with deeper pockets, anything with a price tag of $500 or above is connected to a security device, which puts a damper on trying garments on.

May Co. has admitted that Lord & Taylor is a work in progress. Yet it and every other aspect of the May business has come under scrutiny since Gene Kahn abruptly resigned as chairman and chief executive officer of the retail giant last month and news leaked that Federated Department Stores was in talks about acquiring the St. Louis-based retailer.

Whether Federated buys May, is acquired by another suitor or is left to turn around its business under a new chairman and ceo, a new team will have to cope with the aftermath of Kahn’s tenure, which has left an indelible mark on employees.

Kahn could not be reached for comment, while current members of the May board did not return telephone calls and May executives declined comment.

But Kahn is said to have fostered a culture where dissension wasn’t broached. As a result creativity — and results — suffered.

Under Kahn’s leadership, net profits at the $13.34 billion, 500-department store operation have been shrinking steadily over the last few years, from $927 million in 1999 to $434 million last year. Same-store sales and the stock price declined, although in recent days, the stock price has picked up, only to fall again on Thursday.

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