The Mother Ship 09/27/06

The old & the new: State Street 09/27/06

Macy's on State Street 09/27/06

The Christmas Store went up in the store on 9/22 May God have mercy on our souls

RETAIL REBRANDING

Hundreds of Stores to Get Different Name -- Macy's
Familiar chains across the U.S. will fall under a single banner with Saturday's changeover.

By Abigail Goldman
Times Staff Writer
From the Los Angeles Times

September 8, 2006

Goodbye, Robinsons-May.

The end officially comes this weekend for the storied Los Angeles chain as Federated Department Stores Inc. completes a massive make-over that will rebrand shopping nameplates across America.

Houston is losing Foley's; Filene's will no longer be a Boston institution; Chicago is saying farewell to Marshall Field's; and Famous-Barr, based in St. Louis, is finished, along with seven former regional chains that also are becoming Macy's on Saturday.

But the question in the malls this fall is whether shoppers are ready to say hello to Macy's, the department store giant that doubles in size this weekend.

"I'm just kind of disappointed," mused Phyllis Jacob, a 66-year-old legal secretary from West L.A. as she perused the changes at her old Westside Pavilion Robinsons-May. "Maybe it's just something to get used to."

With much fanfare, parades and advertising like crazy, Macy's is throwing a nationwide party to officially unveil the renamed and revamped May Co. stores it bought a year ago for $11 billion.

Which stores benefit — Macy's or its competitors — will be unclear until Christmas or later.

"Competition is ferocious, make no mistake," said Kurt Barnard, president of Barnard's Retail Consulting Group in New York. "First of all, there is Target, there is Kohl's, J.C. Penney; there are so many others and they all have the opportunity to show their mettle."

"They are going to try their level best to steal market share from Macy's," he added, "but Macy's, in general, is well prepared."

Nationwide, Federated will be converting about 400 former May Co. stores, which operated under 11 different names including Robinsons-May, to the Macy's brand.

That will give the Cincinnati-based company, with more than $27 billion in annual sales, more than 800 stores in 45 states.

In California, of the 49 Robinsons-May stores Federated acquired, 26 were shuttered and 23 officially will be renamed Macy's on Saturday. In all, Federated will have 71 Macy's stores in Southern California for a total of 111 stores and 31,000 employees across the state. That's in addition to its six Bloomingdale's stores in California.

Federated is literally rolling out the red carpet as part of efforts to welcome customers into Macy's stores. Employees will distribute gift cards, host celebrity appearances, offer craft projects for kids and hand out as many cupcakes, jelly beans and other goodies as they can foist on passersby.

And to get the word out, the company is launching its largest-ever advertising blitz, with newspaper, magazine and billboard advertisements.

Radio and television spots in English and Spanish will feature a reworked version of the Motown hit "Dancing in the Streets" — calling out the names of cities getting new Macy's stores.

"We look at this as a once-in-a-lifetime opportunity," Federated Chairman Terry Lundgren told investors Wednesday at the Goldman Sachs Global Retailing Conference in New York. "We intend to bring affordable luxury and fashion to America with this launch."

Now all he needs is to boost sales and profits, something that analysts say will be a daunting challenge.

"I think the perception is that Macy's is a little higher fashion content and a little higher quality and a little higher price," said Bob Buchanan, a financial analyst with A.G. Edwards in St. Louis. "That perception, which does involve a dollop of reality, will probably shift some moderate shoppers over toward Kohl's and Mervyns and Penney's."

That's where the real money is, Buchanan said, because fewer customers buy at the higher end. Federated's challenge is to keep those moderate customers by keeping costs in line a tough battle when up against ultra-efficient players such as Kohl's.

"As I look at the whole equation, the big winner over the next 12 to 18 months is going to be Kohl's," he said. "I think the big loser could be Federated, because up until now, they've been unable to gain much efficiencies as a result of the merger."

Kohl's Corp., J.C. Penney Co. and Target Corp., declined to comment. Nordstrom Inc. did not return calls.

Across the country, regional department store chains traditionally have endured by catering to local tastes and offering shoppers a bit of local tradition: Frango Mints and Christmas windows at Chicago's beloved Marshall Field's stores, the annual Christmas tree lighting at Filene's in Boston and Macy's Thanksgiving Day parade in New York City.

The store names evoked images of hometown 19th century dry-goods salesmen done good: Lyman S. Ayres in Indianapolis, George Draper Dayton in Minneapolis, Joseph Winchester Robinson in Los Angeles, David May in Leadville, Colo.

Robinson, the son of a Massachusetts merchant, opened the Boston Dry Goods store at Temple and Spring streets in Los Angeles in 1883. It grew into a tony retailer with a fancy Wilshire Boulevard address at its best-known store in Beverly Hills.

Robinson's became a place that drew leading designers, top fashion models and European royalty to launch their collections. The store took on the May name a few years after merging with May Department Stores Co. in 1986.

But consolidation and years of battering by discounters dragged many of the department store chains into a cycle of flagging sales and dreary stores. Through mergers, or in ill-fated attempts to appeal to a wider array of shoppers, many of the once-proud chains slid into homogenous warehouses with racks of indistinguishable merchandise.

In a nod to tradition, Macy's promised Chicago that it would keep their mints and told Boston that the tree lighting would go on. In Southern California, however, few shoppers gave the changeover a second thought.

"With fewer and fewer department stores, whether it has a May name or a Federated name or anything else probably doesn't matter," said Michael Niemira, chief economist for the International Council of Shopping Centers.

Karen and Brent Byrd of Rancho Park said that although they loved the old Robinson's, the stores being changed over this weekend began to lose their luster back in 1993, when St. Louis-based May first added its name to the local signs.

"That was the death knell," said Karen Byrd, 54, who runs a radiology network. "May was a step down."

Taking in the new brighter, wider aisles at the Westside Pavilion store, with entryways already adorned by the bright red Macy's logo, the couple said they had higher hopes for the new store.

"I'm not sure Robinsons-May ever established its own identity," said Brent Byrd, a 50-year-old certified public accountant: "You didn't know it for great service or great merchandise, it just sort of went along."

Those who said they missed Robinsons-May mostly pointed to value.

"Me and my friends, we're all missing it," said Cristina Gregory, a 48-year-old jewelry designer from Santa Monica. "I hope they'll have more quality items at more affordable prices than what Macy's is known for."

In Southern California, the acquisition of Federated left some malls with duplicate stores and others with an empty anchor spot to fill. Glendale Galleria, Northridge Fashion Center and Lakewood Center, which had hosted both Macy's and Robinsons-May, will now just have a single Macy's store.

South Coast Plaza in Costa Mesa will keep the three Macy's stores it has had for the last few years: a Macy's, a Macy's Men's Store, and a Macy's Home Furniture store. The mall's Robinsons-May store will become a Bloomingdale's.

At the giant Del Amo Fashion Center in Torrance, Federated will operate a Macy's home store and, for the ultimate in convenience, two full Macy's stores in the spots that once held the two competitors.

"We're not only a survivor but a thriver," said Robert Mettler, chairman of Macy's West. "And to be able to do things uniquely different for our marketplace is very exciting."

Abigail.Goldman@latimes.com


Rechristened

Here are some of the department store chains that are becoming part of Macy's.

Robinsons-May: Robinson's founded in 1883 in Los Angeles and May in 1877 in Leadville, Colo.; the chains merged in 1993. Stores in California, Arizona and Nevada.

Foley's: Founded in 1900 in Houston. Stores in Texas, Oklahoma, New Mexico, Colorado and Louisiana.

Filene's: Founded in 1881 in Boston. Stores in Massachusetts, New York, Maine, New Hampshire, Connecticut, Rhode Island and Vermont.

Famous-Barr: Founded in 1911 in St. Louis. Stores in Missouri, Illinois, Indiana and Kentucky.

Marshall Field's: Founded in 1881 in Chicago. Stores in Illinois, Michigan, Ohio, Indiana, Wisconsin, Minnesota, North Dakota and South Dakota.

Hecht's: Founded in 1857 in Baltimore. Stores in Maryland, Virginia, the District of Columbia, Pennsylvania, North Carolina and Tennessee.

Kaufmann's: Founded in 1871 in Pittsburgh. Pennsylvania, Ohio, New York and West Virginia.

Meier & Frank: Founded in 1857 in Portland, Ore. Stores in Oregon, Washington and Utah.

A retail history

• 1877: May Department Stores founder David May opens his first store, a mining supply shop in Leadville, Colo.

• 1883: Joseph Winchester Robinson opens the Boston Dry Goods store at Temple and Spring streets in Los Angeles.

• 1891: Robinson's company is incorporated as J.W. Robinson.

• 1923: May Department Stores opens its first Los Angeles store.

• 1955: Associated Dry Goods buys J.W. Robinson.

• 1986: May Department Stores buys Associated Dry Goods; Robinson's and May stores continue to operate separately.

• 1993: Robinson's and May chains merge, forming the Robinsons-May store brand.

• 2005: Federated Department Stores buys May Department Stores.

• 2006: Robinsons-May stores are renamed Macy's.

Copyright © 2006, The Los Angeles Times

Macy's rolls out biggest ad campaign

Store nameplate conversions prompt all-out Federated push

Tribune staff reports

September 6, 2006, 7:58 PM CDT

CINCINNATI -- Federated Department Stores Inc. will promote the conversion of 400 stores into Macy's with its biggest-ever advertising campaign beginning this week.

The marketing push, which starts Thursday, will make Federated one of the largest advertisers in the U.S. this year, Chief Marketing Officer Anne MacDonald said, without providing figures.

The company, which also owns Bloomingdale's, was 23rd last year with $1.45 billion in spending, according to Advertising Age.

Macy's first nationwide television campaign will promote the chain's "Way to Shop" theme and use a re-recording of the Motown tune "Dancing in the Streets." The ads come 18 months after Federated announced its $11 billion acquisition of May Department Stores Co. The company is converting stores to the Macy's name Saturday, doubling the total.

The company is ramping up its Spanish-language advertising as it gains more Hispanic customers in Florida, Texas, California and Colorado, MacDonald said. It's also marketing more in Chicago, Minneapolis and Boston, where its Marshall Field's and Filene's stores will disappear. The ads were designed by JWT Chicago.

"It's an invitation to the customer to see why Macy's is better and what they have to offer, and down the road that will be a successful process," said David Heupel of Thrivent Financial for Lutherans in Minneapolis. "In the interim, that will create some churn."

The campaign will run into November with "heavy frequency," MacDonald said. The promotion also includes thousands of free $10 gift cards and the mailing of 3.8 million catalogs.

"All around the country, those grand old retail names will disappear overnight," said Wendy Liebmann, president of consulting firm WSL Strategic Retail in New York. "It's one thing when you start from scratch. It's another thing when you kick out the old grandmother."

The company has to win customers made skeptical by their loyalty to the former store nameplates that will vanish, said Stephen Hoch, a marketing professor at the University of Pennsylvania's Wharton School in Philadelphia.

While the retailer says it ultimately will save money by advertising one Macy's brand nationally, such ads go only so far to sell apparel that differs from region to region, Hoch said.

The risk is that Federated will spend large sums of money to no avail, Hoch said. "The worst case is that it's a money pit," he said.

James Dion, founder and president of the Chicago-based retail consulting firm Dionco Inc., said the plans for a nationwide program of community service projects that will begin Sept. 15 in selected cities also was a good move.

"I think that any business or retailer has got to be perceived as giving back to the community," Dion told The Associated Press. "This resonates with people that Macy's is not just a big company coming in to suck money out of the local community."

Copyright © 2006, Chicago Tribune

FIELD'S FINAL DAYS

Hard-core fans stay loyal to brand

In Chicago, Marshall Field's devotees are planning rallies, cutting up Macy's credit cards and vowing never to shop at the stores again

By Sandra Jones
Tribune staff reporter

September 5, 2006

Gail Heriot is taking the demise of Marshall Field's to heart.

The California lawyer dug into her own pocket this summer, spending more than $2,000 to print and distribute 25,000 "Keep It Field's" lapel stickers to similar-minded Field's fans. She mailed thousands of decals from her home in San Diego and flew to Chicago last month to hand out more near Field's State Street flagship--slated, along with the rest of Field's 61 department stores, to become Macy's on Saturday.

Few brands have inspired such a public outcry. But every once in a while folks who might never attend a political protest or campaign fundraiser rally together when a favorite product is taken away.

It happened with the Ford Motor Co.'s Thunderbird, and twice to the king of brands Coca-Cola Co. with Coke and Tab colas.

The prospect of losing a beloved soda or car can strike deep for true fans. To them, the loss seems terribly unfair and unreasonable, and they don't take it sitting down.

"Part of what drives people to rally or protest is when they feel there is a big power or corporate behemoth behind it," said David Ruder, managing director of Chicago-based risk assessment firm Adaptive Alpha LLC. "It's not just that something is going away, it's being taken away. The only power they have left is to protest."

With Field's, a relentless chorus of disenchanted shoppers has voiced its objections ever since owner Federated Department Stores Inc. disclosed its decision in September 2005 to mothball the Field's name along with about a dozen other regional department store names in an attempt to create a national brand.

In Chicago, Field's devotees are planning rallies, cutting up Macy's credit cards and vowing never to shop at the stores.

"It's been hard to explain to Californians, but I love Marshall Field's," said Heriot. "Some people love baseball teams. I love Marshall Field's."

Heriot developed her affection for Field's while living in Chicago for a decade after college. She has also lived in Washington, D.C., home of Hecht's, which Federated is also converting to Macy's. And she has lived in Philadelphia and shopped at Wanamaker, before it became Hecht's. But neither store struck a spark with her the way Field's did.

"Marshall Field's is special for a lot of reasons," she said. "It's unusual for a department store to be so intertwined with a great city."

On the day the name changes, a grass-roots organization called FieldsFansChicago is planning to rally at 9:30 a.m. at the corner of State and Washington Streets outside the Field's flagship.

Since founding the organization through a Web log, or blog, in November, James McKay says there have been thousands of posts from disgruntled Field's shoppers. McKay has never organized a rally and "sometimes feels like kind of a nut" as the reluctant leader of the Field's fans. But as the pressure built from the blog's posters to hold a rally, he stepped up. Changing the Field's name to Macy's is like calling the New York Yankees the Chicago Yankees or Wrigley Field Shea Stadium, McKay said.

Pat Craven, another fan, joined McKay in making 150 T-shirts inscribed with the motto "Chicago Shops at ... Marshall Field's (not Macy's)" and selling them for $20 through the FieldsFansChicago.org Web site and for up to $45 on eBay.

Craven hopes to convince a group of friends to ride their motorcycles to State Street and circle the Field's store wearing the T-shirts and carrying signs to protest the name change.

"We're standing up as free Americans exercising our right to say we are mad about the change," Craven said. "Field's is Chicago and Macy's has always been New York. My feeling is they don't care what the customer wants."

Macy's, for its part, is taking the dissent in stride and banking that once the name is changed, shoppers will discover that they like Macy's after all.

Frank Guzzetta, chairman of Macy's North, the Minneapolis-based division that operates Marshall Field's and other stores in the upper Midwest, estimates less than 1 percent of the Field's credit card holders have sent back their Macy's cards so far. Almost all of the complaints have come from the Chicago area, he said.

Guzzetta read and responded to most of the angry letters and in about 30 cases said he called customers himself.

Macy's isn't taking anything away, he said, but simply changing the name. The building, traditions and merchandise assortment will remain "fundamentally" the same, he said.

"When customers come to the store and see that we have what they want and see that they like it, that's the only way to win loyalty," Guzzetta said. "There are probably a number of people who won't give us a shot because to them it was about the name. It's not rational, it's emotional, and I can't change people's emotions. Our wish is the next generation will become emotionally attached to Macy's."

Such intense emotional attachment to a brand name is hard to come by, but when it happens, it's powerful. The quintessential example, say brand experts, is the New Coke marketing blunder in the 1980s.

Coca-Cola was losing out in blind taste tests to PepsiCo. Inc.'s sweeter Pepsi and feared losing market share to its No. 2 rival. So Coca-Cola shelved Coke and came out with New Coke, a sweeter recipe that beat Pepsi in blind taste tests.

Coke drinkers rebelled. Even though a new set of blind taste tests proved consumers still preferred the sweeter recipe of New Coke, their attachment to the old brand remained. A grassroots group formed claiming 100,000 members in a call to bring back the old Coke.

Coca-Cola reported receiving 1,500 calls a day to its consumer hotline, more than triple the typical rate. Eventually, Coca-Cola brought back the old formula under Coke Classic and shelved New Coke for good.

Similarly, thousands of Tab lovers called and wrote Coca-Cola in the 1980s when it changed the formula of the hip '70s cola in the pink can. Coca-Cola eventually relented.

Car lovers did the same with the Thunderbird a decade ago. Ford stopped production in 1998 because of declining sales but brought the car back three years later amid consumer outcry. It finally retired the model last year.

"Brand equity takes years and years and years to fully develop and flourish," said Torrey Foster, managing partner at Heidrick & Struggles' global consumer practice in Chicago. "A brand can't be created overnight and it can't be killed overnight."

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smjones@tribune.com

Copyright © 2006, Chicago Tribune