FEDERATED SAYS MARGINS LOW IN ELECTRONICS

NEW YORK — Consumer electronics failed to generate the profit margins of other categories and produced just 3 percent, or $151 million, of Federated Department Store sales of $5.03 billion in 1996, a spokeswoman for the retail organization noted Monday.
That is part of the reason Rich’s, Lazarus and Goldsmith’s — all part of Federated — will cease selling consumer electronics by yearend and will use the space for more profitable apparel and home goods, the spokeswoman said, in confirming a story carried in these columns Monday.
The three chains, which make up a Federated division, have been phasing out the category over the last year.
Items such as televisions and personal computers are carried in only 39 of the division’s 76 stores.
“I think all the department stores ought to get out of electronics,” said Robert Buchanan, retail analyst at NatWest Securities.
“I applaud Federated for being more proactive than some of their competition,” Buchanan added.
Rich’s, Lazarus and Goldsmith’s are feeling the heat from rivals such as Circuit City, Best Buy and Sun Television & Appliances.
The Federated chains operate in nine states in the Midwest, Southeast and Pennsylvania.

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