FEDERATED OPENS DOOR TO NEW SUPPLIERS, SAYS ‘NO MATRIX HERE’
Byline: David Moin
NEW YORK — Though it’s merging divisions and building a core group of suppliers, the $14 billion Federated Department Stores says there’s room on its vendor list for more players and, as proof, will stage a five-day vendor event next month.
“We must not get complacent and only focused on those major vendors that are broadly distributed,” said Terry Lundgren, chairman and chief executive officer of Federated Merchandising, in an interview Friday. “It’s very, very easy for a company our size to be plain vanilla. We have to be aggressive finding new opportunities. We can’t sit back. It won’t happen naturally.”
To make it happen, Federated Merchandising will hold a giant show-and-tell on March 27-31 on the seventh floor of 1440 Broadway.
According to Lundgren, the event will be an opportunity for up to 500 vendors to get in the door. It’s open to any vendor seeking to ship to Federated and Macy stores, but not those seeking to sell Bloomingdale’s or private label services.
FM merchants will audition each vendor in a private conference room for an hour, including the time it takes to break out the samples. There is no fee.
FM merchants are responsible for identifying and evaluating around 70 percent of the goods bought by the Federated divisions, with the exception of Bloomingdale’s. FM currently deals with around 3,000 suppliers, a list that has been narrowed somewhat over the last few years. Federated officials acknowledge there has been some weeding out, but insist that there is no matrix, and that its vendor list is flexible.
“We have a discipline in place that says we are evaluating; in some cases, that may lead to disappointments” for resources not performing and of little value to the company, Lundgren said. It’s necessary for Federated to have “an editing process,” he stressed.
The vendor fair is unprecedented for Federated, but not for the industry. The Limited Inc. staged a similar trade fair in 1987 at its headquarters in Columbus, Ohio, for domestic suppliers. The turnout was strong, with about 1,200 suppliers participating, though the event was never repeated.
Other retailers, ranging from Bloomingdale’s to Kmart and Henri Bendel, have also had designated days where designers and manufacturers could pitch their merchandise to buyers.
Lundgren said it’s already in the back of his mind to stage another fair in the fall. The decision will be based on the success of the first one.
Each day of the week of March 27 will be devoted to different categories, beginning Monday with men’s and children’s wear. Home furnishings, gifts, electronics and tabletop will be on Tuesday; Wednesday and Thursday are ready-to-wear and sportswear days, and Friday will be for shoes, accessories, cosmetics and intimate apparel.
The fair will be held on a first-come, first-serve basis, so Federated is expecting a flood of requests today, from suppliers eager to set up appointments and write orders. They are required to fax coupons which are in WWD and DNR today, the Feb. 20 edition of Home Furnishings Network and WWD again on Feb. 27. At the fair, there will be 100 FM merchandise managers and vice presidents and 25 logistics and support personnel. Orders won’t be written on the spot, giving FM a few days to consider each line. Lundgren said FM plans to get back to the vendors with thumbs up or thumbs down within a week of the appointment.
This year, FM launched a new policy of having its merchants spend at least one day in the market each month visiting new suppliers. It seems to be gaining momentum. Currently, fast-turning businesses, particularly juniors and dresses, are visited each Thursday and are a high priority. Accessories vendors are visited one day every other week.
As word got around that Federated was receptive to shopping for new resources, requests started flooding 1440 Broadway. The vendor fair, said Lundgren, is a vehicle to see a lot of newness in a short span of time.
Asked how much room there is for new vendors at Federated, Lundgren replied, “There is no limitation. It’s really a matter of what we see and how successful those people are at offering something different. We’re in a good position right now for this. We’re doing a good job of editing and trying to eliminate the duplication in our stores. We now have a clear process in place constantly challenging ourselves about what we have and don’t have.”
Asked about the current state of the business, Lundgren cited “a resurgence in sportswear in the last 45 days” and particular strength in cosmetics and special sizes, while dresses are picking up.
Accessories, juniors and outerwear have not been performing as well, and home business is still good, but not as strong as last year.