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Federated to Rename 5 Chains as Macy's

September 14, 2004|From Bloomberg News

Retailer Federated Department Stores Inc. said Monday that it would change the names of all 184 of its regional department stores to Macy's, dropping such brands as Rich's and Burdines, to expand the chain nationally.

The name change, which also will affect Lazarus, Bon-Marche and Goldsmith's, will be made by the end of January, Cincinnati-based Federated said. The company will then operate stores exclusively under the Macy's and Bloomingdale's nameplates.

The move is the latest by Chief Executive Terry Lundgren to expand Macy's throughout the country after appending the Macy's name to those of the other chains. Operating all the stores under a single name will enable Federated to coordinate marketing and purchasing. The company has been centralizing these operations for the regional chains' furniture and other home merchandise.

"Macy's is a widely known and respected name among traditional department stores," said Bill Dreher, an analyst at Deutsche Bank in New York.

The chains whose names are being dropped are among the oldest department stores in the country. F&R Lazarus & Co. was founded in Columbus, Ohio, in 1851, seven years before R.H. Macy & Co. opened its doors in New York. Rich's started in 1867 in Atlanta; Goldsmith's opened in 1870 in Memphis, Tenn.; Bon Marche started in Seattle in 1890; and Burdines was established in Miami in 1898.

Federated has 239 Macy's stores, excluding those in the regional chains, and 36 Bloomingdale's locations.

Costs to change signs, customer credit cards and employee names tags will be covered by the $600 million that Federated previously budgeted for capital expenditures. The management structure of the existing regional divisions will be unaffected, Federated said.

"By keeping the regional arrangement, you keep the community connection," company spokeswoman Carol Sanger said. "That gives us the best of both worlds."

Federated's sales at stores open at least a year have risen in all but one month this year after three years of annual declines.

Shares of Federated rose 72 cents to $45.55 on the New York Stock Exchange.

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