It started in the South with Rich's-Macy's. Now, Federated Department Stores is adding the Macy's moniker to itsbrands from coast to coast. The chain announced Burdines, The Bon Marché, Lazarus and Goldsmith's 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 most divisions Aug. 1; Burdines will convert Feb. 1, 2004.
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 Marché division, to a newly created position responsible for the rollout of Macy'sbrand 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 Lynchanalyst 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 thinks so, though, he adds, “May doesn't have a franchise with a name as widely recognized as Macy's.” Dillard's, with its respected regional name, could represent a possible acquisition for May in response to the spread of the Macy's brand, says Sosnick. May would not comment.
The new Burdines-Macy's operates in Florida; Goldsmith's-Macy's operates in Tennessee; The Bon Marché-Macy's operates in Idaho, Montana, Oregon, Washington and Wyoming; and Lazarus-Macy's operates in Indiana, Kentucky, Ohio, Pennsylvania and West Virginia.
IN PROGRESS: SIERRA LAKES MARKETPLACE
Developer: Lewis Retail Centers
Location: North Fontana, Calif.
Size: 320,000 sq. ft.
Anchors: Lowe's, Washington Mutual
Opens: January 2004
Average Household Income: $60,504
BUZZ: Hopes to capitalize on a 2,100-acre planned community including a golf course. A business park is planned.