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No More Regional Brands For Federated; Retailer Makes Macy's A National Chain

It started in the south with Rich's-Macy's. Now, Federated Department Stores is converting all of its regional brands to the Macy's moniker from coast to coast. Last Thursday, the chain announced its Burdines, The Bon Marche, Lazarus and Goldsmith's stores will all be renamed with a hyphenated Macy's. Federated's Bloomingdale's division will be the company's only division without a Macy's nameplate attached. Changes will occur at all divisions on August 1, excluding Burdines, which will convert on February 1.

Federated says it will spend $100 million of its $650 million total reinvent budget for 2003 on updating flagship stores in Seattle, Columbus, Cincinnati, Pittsburgh and Memphis to reflect the new brands. The company promoted Peter Sachse, formerly president and COO of The Bon Marche division, to a newly created position that will oversee the rollout of Macy's national brand strategy.

"Having a hyphenated nameplate will enable the customer to shop their favorite regional department store but still get the national brand recognition that Macy's brings to the table," says Merrill Lynch retail analyst Stacy Turnof. "Why wasn't it done a decade ago?" she asks in her report on the announcement.

Could Federated's bold move cause competitor May Department Stores to follow suit? Fahnestock & Co. analyst Bernard Sosnick says yes, "though May doesn't have a franchise with a name as widely recognized as Macy's." Sosnick says Dillard's, with its respected regional name, could represent a possible acquisition for May as it seeks to respond to the spread of the Macy's brand.

The new Burdines-Macy's operates in Florida; Godsmith's-Macy's operates in Tennessee; The Bon-Macy's operates in Idaho, Montana, Oregon, Washington and Wyoming; and Lazarus-Macy's operates in Indiana, Kentucky, Ohio, Pennsylvania and West Virginia.

Related Resources:
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