NEW YORK — Federated Department Stores’ new team of top operations executives, an-nounced Monday, is a strong lineup that will police cost controls and push for greater centralization of functions, observers said Tuesday.
As reported, James Gray, president of Federated’s Burdines division, will become president of Macy’s East, reporting to Hal Kahn, chairman and chief executive officer of the division. Gray will succeed Burnett Donoho.
Under Gray’s tenure, Burdines emerged as one of Federated’s most profitable divisions, with particularly effective cost controls. The 45-unit Burdines, considered the leading department store chain in Florida, is expected to generate $1.2 billion in sales this year.
Gray, 55, has been president of Burdines since June 1988. He also has 27 years of experience at Bullock’s, holding positions in data processing and systems before being named controller in 1974 and eventually executive vice president in 1983.
Michael Osborn, 46, executive vice president at Federated’s Stern’s division, will succeed Gray at Burdines, as reported.
Tom Cole, 46, president of Federated Merchandising, will continue in that post, but take on added responsibility for logistics coordination and policy development in the combined Federated/Macy’s. These duties include vendor relations, logistics, distribution and technology. He’ll also have direct responsibility for the distribution functions of Macy’s East, Bloomingdale’s and Stern’s.
Reporting to Cole will be John Williams, senior vice president for Federated’s Northeast distribution; Jerry Cohen, senior vice president for distribution at Macy’s East; and Lisa Lichtenberg, divisional vice president for merchandise technology at Federated Merchandising.
“Federated is moving toward consolidating not only the selling functions, but the sales support functions with central distribution, central financial controls, central systems and perhaps central human resources,” said Robert Kerson of Kerson & Levy Associates. “If you talk about central merchandising, you’ve got to talk about central distribution. All are being consolidated for cost-effective reasons under the corporate umbrella.”
Kerson also said, “Part of the plan may be to give Tom Cole direct responsibility for operating functions, which he normally wouldn’t have attained through Federated Merchandising and possibly to prepare him to operate a division.”
“James Gray has a very fine reputation at Federated,” said Herbert Mines of the search firm bearing his name. “He’s always been a respected a very proficient administrative executive.”
However, he noted, Donoho’s departure is a big loss for Macy’s.
“I think Allen Questrom is installing those people he trusts and knows, people who understand his whole vision and understand the theory, philosophy and economics that underlie the merger,” said Kurt Barnard, president of Barnard’s Retail Marketing Report. “He’s trying to advance the Federated culture.” Questrom is chairman and ceo of Federated.

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