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| One of the first things shoppers might notice in the Macy's changes is no more green. (Tim Boyle/Getty Images ) |
Minneapolis, Minn. — To many retail industry analysts, the most surprising thing about the decision to rename Marshall Field's was how long Federated took to make it.
Federated agreed in February to buy St. Louis-based May Department Stores, including 62 Marshall Field's locations. Many presumed the department store giant would follow its previous record of changing most acquisitions to its marquee brands, especially Macy's.
Retail consultant Howard Davidowitz says while Federated did not rush the decision, it was probably a slam dunk. After all, he says, department stores have the highest costs in the retail industry, and Federated knows centralization works for the bottom line.
"If you've got one name, Macy's, you can save a tremendous amount of money in supplies, marketing cost, advertising umbrella, promotions. You enhance your margin because you're buying more. It's just a fantastic way to do things," according to Davidowitz.
Fantastic, as long as it's not disorienting to consumers. The fear in any retail name change is that consumers attached to the old brand will leave, without new ones to take their place. That risk is probably greatest in Chicago, where the Field's name is attached to a century of history.
Davidowitz says in Minnesota the brand attachment was to Dayton's, which gave way to the Marshall Field's name in 2001.
None of the changes will kick in until next fall, according to Federated Vice Chair Sue Kronick, who was in Minneapolis as the company made its announcement. At that time, one of the first things shoppers might notice is no more green.
"The colors will change," Kronick acknowledged. "It's like I said to my mother-in-law when I got married. 'You didn't lose a son, you got a daughter-in-law.' And there are going to be lots of new and exciting things for customers in Minneapolis."
Kronick says the benefits include Macy's private-label brands, a national bridal registry that includes all other Macy's stores, and a rewards card that applies around the country. She says there are no plans to close any existing Marshall Field's locations.
The Marshall Field's announcement is part of a bigger reorganization by Federated. The Marshall Field's stores, along with the existing Macy's in the Mall of America and one store converted from another brand in Indiana, will comprise a separate regional division known as Macy's North. The division headquarters will be in Minneapolis. Kronick says this means no anticipated job cuts for the 1,100 who work there now.
"A very important part is this team, and the relationship to the community, all of that will continue," she says.
Kronick says Macy's North will continue to have some control over products and store design to suit the local market.
She also says Federated plans to continue Marshall Field's existing philanthropic commitments, though the focus may shift over time to reflect a charitable focus at Federated that includes women's issues, HIV/AIDS-related causes, and youth programs.
Dave Brennan, a retail professor at the University of St. Thomas, thinks the move will benefit shoppers. But he does expect Federated to close underperforming stores and trim staff over time.
"Some of those jobs are still going to migrate back down to Cincinnati, where Federated is located. And those are more of the operations people, the finance people, those are the type of jobs that are core corporate jobs, and those jobs will go," says Brennan. "So it's not that there won't be something (of a) direct impact locally. There will be some."
To make the move a success, Federated is counting on shoppers like Jenell Nalick, who was shopping at Marshall Field's in Minneapolis just after the announcement. The name on the store, who owns it, and what color it is aren't the reasons she shops here.
"They've got great deals," Nalick says. "So as long as Macy's has the great deals, it won't matter."
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