Tough row to hoe at Field's
August 10, 2006
BY SANDRA GUY Business Reporter
Shoppers are getting glimpses of a Macy's overhaul at Marshall Field's on State Street, but the parent company knows it faces an uphill battle for acceptance with Marshall Field's loyalists.
In response to an analyst's question on a conference call announcing better-than-expected financial results Wednesday, Federated Department Stores Chief Financial Officer Karen Hoguet said, "We'll just have to see what happens. We're fairly optimistic that when the Chicago customer sees that we are keeping the best of Marshall Field's and enhancing it greatly with the best of Macy's, he and she will be pleased."
The reaction will come on Sept. 9, the day when the 138-year-old icon that is Marshall Field's will be replaced by Macy's.
THE STATE OF THE STATE STREET STORE
The transition of Field's into Macy's is under way at the Field's flagship store at 111 N. State.
A Frango Mints viewing kitchen, where shoppers can watch workers dip Frangos in chocolate, is under construction next to the Frango Cafe on the seventh floor of the flagship store.
Salespeople are being trained to explain how new women's private label clothing, such as Inc, Alfani and Charter Club, compare with old labels no longer in the store.
And a private entrance to the women's couture 28 Shop at 28 E. Washington is under construction.
Skepticism reigns on the Web site dedicated to Fields' supporters, www.FieldsFansChicago.org.
James McKay, a Chicagoan who runs the Fields' fans Weblog, is skeptical of Federated's announcement Wednesday that sales lagged at Marshall Field's and 10 other former May Department Store chains because of store remodeling disruptions, merchandise change-outs and clearance sales.
"I'd think everything should be flying off the rack with clearance sales," he said, "and the remodeling has been minimal."
The slow sales at the former May Department Stores, which Federated acquired on Aug. 30, 2005, were among the few blots on an otherwise stellar earnings report.
Federated raised its forecast for sales and profits in the crucial back-to-school and holiday seasons based on better-than-expected results at its Macy's and Bloomingdale's stores in the three months ended July 29.
Second-quarter net income more than doubled with help from a cash refund from the Internal Revenue Service.
The company reported net income of $317 million, or 57 cents a share, more than double year-ago profits. Excluding costs of the May stores takeover and the sale of credit card receivables to Citigroup, profits totaled 49 cents a share, higher than Federated's earlier forecast.
Revenue totaled $6 billion, up 66 percent, but missed analysts' consensus estimate of $6.15 billion. The revenue includes Macy's, Bloomingdale's and the former May Department Stores.
Sales at Macy's and Bloomingdale's stores open at least a year rose 4.6 percent in the quarter, the best showing in more than two years.
Federated's stock jumped on the news, but ended the day up 67 cents, or about 2 percent, ending at $34.46.
David Heupel, portfolio manager for Thrivent Investments, said Federated's results show that it has managed inventory and merchandise mixtures well.
Though Heupel believes that the Macy's transition will involve "lots of fits and starts," he sees Federated's takeover of May, including Marshall Field's, as a positive one in the long run.
"Down the road, this can be a very powerful and profitable company under one roof," Heupel said.
BY SANDRA GUY Business Reporter
Shoppers are getting glimpses of a Macy's overhaul at Marshall Field's on State Street, but the parent company knows it faces an uphill battle for acceptance with Marshall Field's loyalists.
In response to an analyst's question on a conference call announcing better-than-expected financial results Wednesday, Federated Department Stores Chief Financial Officer Karen Hoguet said, "We'll just have to see what happens. We're fairly optimistic that when the Chicago customer sees that we are keeping the best of Marshall Field's and enhancing it greatly with the best of Macy's, he and she will be pleased."
The reaction will come on Sept. 9, the day when the 138-year-old icon that is Marshall Field's will be replaced by Macy's.
THE STATE OF THE STATE STREET STORE
The transition of Field's into Macy's is under way at the Field's flagship store at 111 N. State.
A Frango Mints viewing kitchen, where shoppers can watch workers dip Frangos in chocolate, is under construction next to the Frango Cafe on the seventh floor of the flagship store.
Salespeople are being trained to explain how new women's private label clothing, such as Inc, Alfani and Charter Club, compare with old labels no longer in the store.
And a private entrance to the women's couture 28 Shop at 28 E. Washington is under construction.
Skepticism reigns on the Web site dedicated to Fields' supporters, www.FieldsFansChicago.org.
James McKay, a Chicagoan who runs the Fields' fans Weblog, is skeptical of Federated's announcement Wednesday that sales lagged at Marshall Field's and 10 other former May Department Store chains because of store remodeling disruptions, merchandise change-outs and clearance sales.
"I'd think everything should be flying off the rack with clearance sales," he said, "and the remodeling has been minimal."
The slow sales at the former May Department Stores, which Federated acquired on Aug. 30, 2005, were among the few blots on an otherwise stellar earnings report.
Federated raised its forecast for sales and profits in the crucial back-to-school and holiday seasons based on better-than-expected results at its Macy's and Bloomingdale's stores in the three months ended July 29.
Second-quarter net income more than doubled with help from a cash refund from the Internal Revenue Service.
The company reported net income of $317 million, or 57 cents a share, more than double year-ago profits. Excluding costs of the May stores takeover and the sale of credit card receivables to Citigroup, profits totaled 49 cents a share, higher than Federated's earlier forecast.
Revenue totaled $6 billion, up 66 percent, but missed analysts' consensus estimate of $6.15 billion. The revenue includes Macy's, Bloomingdale's and the former May Department Stores.
Sales at Macy's and Bloomingdale's stores open at least a year rose 4.6 percent in the quarter, the best showing in more than two years.
Federated's stock jumped on the news, but ended the day up 67 cents, or about 2 percent, ending at $34.46.
David Heupel, portfolio manager for Thrivent Investments, said Federated's results show that it has managed inventory and merchandise mixtures well.
Though Heupel believes that the Macy's transition will involve "lots of fits and starts," he sees Federated's takeover of May, including Marshall Field's, as a positive one in the long run.
"Down the road, this can be a very powerful and profitable company under one roof," Heupel said.
posted by Anonmous at 9:06 PM
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