CINCINNATI — Federated Department Stores says it will rebrand about 330 stores as Macy’s in the fall of next year that it is acquiring through its pending merger with The May Department Stores Co., eliminating several regional chain names, including Filene’s.
As part of the same process, Federated said it will shut down 68 stores at 66 malls, starting after the holiday season, in 2006, because it has duplicate locations there. Included are 41 current May Company stores in 12 states as well as 14 Macy’s stores, including the 35-year-old, 309,000-square-foot Macy’s in the Warwick Mall. The Filene’s store in the same complex will be rebranded as Macy’s.
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Federated said the number of divestitures is consistent with its original expectations, and that it will continue to study the May Company store portfolio in light of the merger. In addition to the locations being divested, a “small number” of stores are being studied for potential conversion to the Bloomingdale’s nameplate, the company said, adding that “some plans may change” as conversion dates approach.
Once duplicate stores are divested, the remaining Macy’s in that location will include employees from both locations, Federated said, and all management personnel in good standing from both stores and the “vast majority” of associates will be offered jobs.
“It is important for associates of both companies to understand that we will be as sensitive and caring as possible throughout this process,” Lundgren said. “We will honor the pledge made previously to May Company associates that there will be no workforce reductions or job eliminations as a result of the merger prior to March 1, 2006.”
The conversion process will affect all Filene’s stores in New England and New York, as well as other longstanding regional chains such as Hecht’s, Kaufmann’s, Foley’s and Strawbridge’s. In March, Federated rebranded its own regional chains to Macy’s as well.
Lord & Taylor stores will keep their separate identity, the company said.
Once the rebranding is completed, Macy’s will have about 730 stores, “representing virtually every major U.S. market,” Federated chairman, president and CEO Terry J. Lundgren said. He promised “the best of both worlds”: the national reach of the Macy’s brand, and the “community commitment and local focus” for which May and Federated “are well known.”
Lundgren said the decision to rebrand “was based on careful study and new research on customer preferences in May Company communities.” Customers wanted the “fashion and affordable luxury” of Macy’s, and Federated has strengthened the brand with store improvements, simplified pricing and enhanced marketing, he said.
“With this expanded geographic coverage, we now will be positioned to nationally advertise the Macy’s brand,” he said. In addition, there will be more stores for Macy’s Star Rewards card customers and gift card recipients, and a nationwide wedding registry.
“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,” Lundgren said. “At the same time, we also have learned from our own experience converting Federated’s regional nameplates. Our customers tell us through research and from their behavior that what’s inside a store – the merchandise, the service, the people, the shopping environment – is what matters most. And this is where Macy’s excels.”
Shareholders of Federated and May Company have approved the merger, which is expected to close in the third quarter of this year, pending completion of regulatory review.
Federated’s home page is www.fds.com.
