NEW YORK -- Chaim Y. Edelstein, the straightforward, demanding chairman and chief executive officer of Abraham & Straus/Jordan Marsh, resigned Friday.
He is leaving a $1.4 billion chain, the largest division of Federated Department Stores Inc., but one that has not been living up to expectations.
"I've been doing this job for nine years. It's time for a change," said Edelstein, who was reached at his office in the Brooklyn-based A&S. "I will announce my plans shortly." He said his last day would be within a couple of weeks. Asked if he was forced out, Edelstein responded, "The announcement speaks for itself." It said he resigned "to pursue other interests."
Allen I. Questrom, Federated's chairman and ceo, could not be reached but a Federated spokeswoman said a successor will be named within a week to 10 days.
There was speculation Friday that Hal Kahn, former president of Montgomery Ward and a long-time senior Macy official, is a candidate to succeed Edelstein. "There have been many rumors about what I am going to be doing," Kahn said. "I will announce my plans in the next few weeks."
Edelstein reported to Allen I. Questrom and to James Zimmerman, president. "I had a very good relationship with the people at Federated," he said. Apparently, there was no bitter disagreement that sparked the departure. However, there were certain nettlesome issues over the last couple of years, among them, the division's slumping sales and its difficult merger with the former Jordan Marsh division, begun in March 1992. In addition, Edelstein reportedly did not see eye to eye with management's move to centralize merchandising through Federated Merchandising Services, based here, which was beefed up with "teams" of executives from all divisions jointly making merchandise decisions. The teams account for about 70 percent of Federated's buying. "He wanted to retain his independence," one source said.
The combined division is heavily concentrated in the Long Island and New England markets, which are sluggishly recovering from the recession. The merger, which involved closing the Jordan Marsh central office in Boston and cutting 500 positions there, has put a big strain on the Brooklyn organization. "Some of the stores are old, but A&S could be the jewel that will make Federated successful one day. It represents 20 percent of Federated's business," said one retail expert. "They may be spending too much time looking at Boston through Brooklyn. Boston requires different marketing plans, different assortments and different leadership." He added that the division incurs very high costs operating two downtown stores in New York, the A&S flagship in Brooklyn and the unit on 33rd Street in Manhattan. Operating costs in the New York area and New Jersey are higher than in other regions. On Friday, there was speculation that Federated felt it was time for new blood to pump up the 35-unit division, which has 17 A&S stores and 18 Jordan Marsh units.
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