CINCINNATI (AP) – Macy’s will replace locally familiar names including Filene’s in New England and Famous-Barr in the Midwest in some 330 stores across the nation under post-merger plans announced Thursday by Federated Department Stores Inc.
Federated also plans to sell 68 stores, including 27 current Macy’s, next year because they overlap in markets with the company Federated is buying, May Department Stores Co. The stores employ 13,500 people, but Federated spokesman Jim Sluzewski said he expected “very few, if any” layoffs and that most workers would be offered other jobs.
Federated has pledged not to cut any jobs before March 1.
Ten May nameplates will be eliminated in fall 2006, Federated said as the Cincinnati-based company laid out what it has in store after its takeover of rival May becomes final.
Federated says May’s Lord & Taylor name, now on 58 stores, will stay, and that it’s studying the Marshall Field’s name. A Chicago landmark, there are 60 Marshall Field’s stores.
“We respect that May Company’s regional store names are deeply rooted in their communities, we appreciate the heritage and traditions associated with those names, and we expect to continue to play an important role in the communities where our customers live and work,” Terry Lundgren, Federated’s chairman, president and chief executive, said in a statement. “At the same time, we also have learned from our own experience converting Federated’s regional nameplates. Our customers tell us … that’s what inside a store – the merchandise, the service, the people, the shopping environment – is what matters most.”
The changes mean Macy’s will have a total of 730 stores across the United States in nearly every major market. Federated’s decisions followed research into customer attitudes.
Federated in March dropped such long-established names as Burdines in Florida, Rich’s in Atlanta and Lazarus in Ohio in favor of Macy’s.
Robert Passikoff, president of Brand Keys Inc., a New York-based customer research marketing firm, said the conversion to Macy’s “makes a lot of sense not only from the economic and communication point of view, but facing up to the realities of the marketplace.”
He said there’s always risk in changing well-known names, but that the regional names no longer have as much impact as they did decades ago while the Macy’s name has a national identity with its stores and the annual Thanksgiving Day parade.
“Macy’s has a lot of currency and a lot of resonating values,” Passikoff said.
The current Federated and May stores have a combined $30 billion in annual sales. Federated said the 68 stores being sold account for $2 billion in annual sales.
All May stores will operate under their existing nameplates through the holidays. Federated said the plans may be adjusted, and that a small number of stores may be converted to Bloomingdale’s.
The May regional department stores involved in the conversion are Famous-Barr, Filene’s, Foley’s, Hecht’s, The Jones Store, Kaufmann’s, L.S. Ayres, Meier & Frank, Robinsons-May and Strawbridge’s. Filene’s Basement stores aren’t owned by May and are unaffected. The Famous-Barr name dates to 1911 in St. Louis, May’s corporate headquarters.
In Pittsburgh, where the Kaufmann’s name dates to 1871, some shoppers weren’t happy at the news.
“I do not like Macy’s,” said Laura L. Lapcevic, 39, who works near the 11-floor downtown store and shops there at least once a week. She worries Macy’s prices will be higher. “Kaufmann’s has good bargains.”
Nick Jordanoff, 70, who bought shorts and a pair of Docker’s pants at Kaufmann’s, considers the store a piece of Pittsburgh history.
“Corporate conglomerates,” he said. “You know they are taking over the world.”
Shareholders of both companies approved the takeover this month. Federated expects the deal to close in the third quarter, following completion of regulatory review.
Shares of Federated rose 47 cents to close at $76.24 on the New York Stock Exchange Thursday, where May shares rose 18 cents to $41.08.
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AP-ES-07-28-05 1649EDT
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