Federated Department Stores acquired the 60-store Marshall Fields in 2005 and last September announced “All Marshall Field’s stores will convert to the Macy’s nameplate in fall 2006.”
Several hundred other acquired May department store brands like Kaufmann’s and Filene’s were also converted to Macy’s as part of a strategy to create a national department store chain that could be advertised nationally.
Customers not buying the change
A new report from Dana Cohen, managing director of Bank of America Securities reduced Federated from a recommended “buy” to “neutral,” in part because of flagging sales at Marshall Fields and other ex-May stores. Although Federated’s legacy Macy and Bloomingdale’s stores reported a 4.4 percent gain, the same-store sales at hundreds of former May Department stores were down by 11 percent.
The report said some possible contributing factors included the sudden conversion of all May nameplates and changes in product assortments emphasizing Macy’s private brands and downsizing some national ones.
“The key issue we are facing is that management miscalculated the impact of these changes,” said Cohen.
Another report indicates that former May locations may have lost 10-20 percent of the shopper base from a year ago.
“They are asking shoppers around the country to give up a brand that a lot of them have had for a long time and have been emotionally attached to, whether it’s a store or product brand,” said Wendy Liebmann, president of WSL Strategic Retail.