FEDERATED’S LUNDGREN ADDS TO ROLE
Byline: David Moin / With contributions from Evan Clark
NEW YORK — Federated Department Stores on Friday said that Terry Lundgren, president and chief merchandising officer, will take on the additional title of chief operating officer on April 15.
Lundgren, who is 50, will continue with his current responsibilities, except that Tom Cole, chairman of the Federated logistics, operations, store planning and systems division, will report to him instead of James Zimmerman, chairman and chief executive of the corporation.
Federated also disclosed that the board had previously extended Zimmerman’s contract “at least” to February 2004 from May 2003. The decision to disclose the extension was apparently made to kill reports that Zimmerman was leaving the company soon and that Lundgren would be ceo.
There has been speculation for some time that Lundgren would one day become ceo when the 58-year-old Zimmerman decides to retire. While Zimmerman has been under pressure to improve Federated’s performance after a tough 2001, and has taken the heat for Federated’s ill-fated $1.7 billion Fingerhut acquisition in February 1999, he is still considered among the best retail operators in the country.
A story in the Wall Street Journal Friday gave the impression that Lundgren was about to be named chairman and ceo and Zimmerman was on his way out, but the story didn’t specify when.
Federated denied the report. “There is absolutely no truth to the Wall Street Journal story about Terry Lundgren being named ceo,” Carol Sanger, Federated’s vice president of corporate communications and external affairs, said in another statement.
Lundgren reports to Zimmerman. The two supervise all of Federated’s retail divisions. “Terry Lundgren has been and continues to be an important leader in our company and, consistent with succession planning that has been in place for some time, this title change and additional responsibility reflect his growing responsibilities,” Zimmerman said.
Lundgren began his retail career in 1975 at Federated’s former Bullock’s division, now a part of Macy’s West, then became a vice president and general merchandise manager of Bullock’s in 1985, and two years later, president of Bullocks Wilshire, then a specialty fashion group owned by Federated.
From 1988 to 1994, Lundgren was at Neiman Marcus in Dallas, serving first as executive vice president of stores and then, in 1990, as chairman and ceo. He returned to Federated in 1994 as chairman and ceo of Federated Merchandising and is credited with integrating Macy’s merchandising and product development functions into Federated and boosting the private brands program to a current 16 percent of total sales.
Since Federated promoted Susan Kronick to group president supervising Burdines, as well as two other regional operations, The Bon and Rich’s/Lazarus/Goldsmith’s in February 2001, there has been speculation about the succession plan, that Lundgren would one day succeed Zimmerman, and that Kronick, who is 50, would step up to president.
That would create a more traditional management team, headed by a merchant, and putting Kronick, whose background is principally in operations, second in command. (She currently reports to Lundgren.) Zimmerman is a financial and operations executive.
Lundgren’s employment agreement, signed April 1, 2000, extends through May 1, 2003.
Federated’s national chains, Bloomingdale’s and Macy’s, continue to operate without a group president.