NEW YORK — Harold D. Kahn, a strong merchant with turnaround skills, has been named chairman and chief executive officer of the struggling Abraham & Straus/Jordan Marsh division of Federated Department Stores.
The move, announced Friday, was expected. It returns the veteran merchant to the Brooklyn-based chain where he started his career as a trainee 24 years ago.
Last week, there were reports Kahn was the top candidate to succeed Chaim Edelstein, who resigned. There were also reports that Federated wanted Kahn due to his long experience as an R.H. Macy executive. Federated is seeking to take over the bankrupt Macy’s chain.
Kahn, 48, is often described as a forceful merchant who at Macy’s had a reputation for pulling divisions into shape.
His last job was with Montgomery Ward where he was president for 14 months until abruptly leaving last December. Reportedly, his relationship with Ward’s chairman, Bernard Brennan, soured and was a factor in his departure. Kahn joined Macy’s in 1975 and rose to senior vice president and general merchandise manager at Macy’s New York. His next key post was president of the Atlanta division.
He moved to San Francisco to head Macy’s California, but was pulled back to Atlanta in 1989 to merge the Macy’s Southern stores and newly acquired Bullock’s stores into Macy’s South.
“He was very well regarded at Macy’s, but kicked around a little bit with the mergers and dragged from coast to coast. I don’t think that sat well with him,” said one former Macy’s executive.
Subsequently, when the Atlanta stores became a part of Macy’s East and Bullock’s joined Macy’s West, Kahn left.
“Edward Finkelstein [former Macy’s chairman] used him as his turnaround man. When a division had a problem, Hal Kahn was dropped into it,” said Robert Kerson, of Levy & Kerson Associates executive search. “He’s a very aggressive merchant, understands how to manage private label and brands and gets the products with the best returns.”
At A&S, Kahn is back in another turnaround situation, Kerson added. But he also noted that Kahn could end up playing a bigger role at Federated if the company’s bid for Macy’s flies.
If that occurs, observers say, it’s likely several A&S stores could be converted to Macy’s, which — despite being bankrupt — still has a more upscale reputation, a wider scope of merchandise and greater recognition among consumers.
Kahn was not available for comment. On Friday, his first day at A&S, Federated chairman and ceo Allen I. Questrom introduced him to the buying and operations staff in the Brooklyn flagship.
“It will be a good transition,” said Kahn’s predecessor, Edelstein. And a short one, too, he added, noting he’ll be at the store only a few more days.
Although A&S is reportedly performing poorly, particularly when compared to other Federated chains, Edelstein defended his nine-year performance as ceo and said the division “has not been underperforming.”
He would not disclose his plans.
Leonard Marcus continues as president of A&S/Jordan Marsh.
A&S is suffering in its difficult merger with the former Jordan Marsh division. The slowly recovering New England and Long Island markets have not helped.
“In addition to his broad base of expertise in all facets of retailing, the very relevant experience he acquired in the merger of Macy’s South/Bullock’s will be of tremendous benefit to the Jordan Marsh division, which has been engaged since 1992 in a similar process of consolidating central operations of two previously separate divisions,” said Questrom, in a statement.
The A&S/Jordan Marsh merger has experienced problems involving integrating systems, rewriting sku numbers, blending the merchandising and labor relations. Stabilizing pricing strategies, which are highly promotional at A&S, are another concern.
The division is discovering taste differences among its customers in Long Island and New England.
The division has been able to pare expenses by laying off 500 people at the former Boston headquarters of Jordan Marsh and through an early retirement program involving 900 employees. Also, back-office operations and merchandising functions have been consolidated, and the division is down to one distribution center, from two.