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Federated's Marshall Plan

What's in a name?

Considerable brand loyalty if you ask Chicagoans.

What is Federated Department Stores Inc. thinking? That's what many Chicagoans, including myself, and others with a strong sense of the retail past are asking one day after Federated said it will re-brand the venerated chain under the Macy's name.

The outrage is palpable. "Macy's has no significance in Chicago. Stay in NY!" one local wrote to the Chicago Tribune online edition. "I urge Chicagoans to boycott Macy's and buy nothing from its store beginning this Christmas!"

Marshall Field's is ... a part of Chicago history," laments a Chicago Sun-Times headline today, reporting the "disbelief and dismay" felt by locals upon hearing Federated's decision to ignore the strong sentiment to maintain the name the chain has carried since 1881.

Federated said yesterday that it will eliminate at least 11 regional names, including Field's, Filene's, Strawbridge's and Hecht's as it expands Macy's to 730 stores nationwide, from 459, according to Federated's Web site. Federated decided to unify the stores under one national banner after acquiring Field's and the other chains in August from The May Department Stores Co. Federated will also continue to expand under the Bloomingdale's name.

"To better serve our customers in this highly competitive retailing environment, we must concentrate on our best national brands and reduce costs so we can deliver outstanding value to shoppers," said Terry Lundgren, Federated chairman, president and chief executive officer, in a press statement yesterday. "We believe that continuing to build Macy's and Bloomingdale's aggressively across America will accelerate our comp store sales performance and increase profitability, thereby driving shareholder value."

True, as one Tribune letter writer noted, it is a case of the survival of the fittest. And people don't get worked over about the demise of the Abraham & Straus or Rich or Goldwater names anymore. However, Marshall Field's was so much a part of Chicago's history. Maybe I'm biased because my first job was at a suburban Field's store. That store is now part of Westfield Shoppingtown Old Orchard, or Old Orchard as we knew it growing up and still call it now. So now it will be Macy's at Westfield. I feel old and obsolete. (What do you think about retailer and developer re-branding? E-mail me at [email protected].)

Fact is, this strategy could backfire. Jean-Pierre Dube, associate professor of marketing at the University of Chicago Graduate School of Business, for one, questions corporate decisions to re-brand successful properties. If there's one lesson to be learned from the consumer products realm, he says, it's that conglomerates often keep the names of well-known brands they acquire.

"Why would you want to re-brand anyhow when you've got a well-known and distinctive brand to begin with? asks Dube. "It's a dangerous strategy." --Beth Karlin

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