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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.

September 08, 2006|Abigail Goldman | Times Staff Writer

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.

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