Federated Moves Mark the End of Marshall Field’s
Cincinnati, Marshall Field’s is out, and Macy’s is in. Federated Department Stores, which acquired Marshall Field’s when it bought May Department Stores in August, decided to roll out the Macy’s nameplate to all 62 Marshall Field’s stores.
Federated also announced that it plans to cut up to 6,200 jobs beginning in 2006. About 1,700 of the cuts will fall at May’s St. Louis headquarters. Another 4,500 cuts will occur as the chain phases out divisional operations in Boston, Houston, Arlington, Va.; and Los Angeles.
Referring to the decision to drop the Marshall Field’s name, Federated CEO Terry Lundgren said: “We have great respect for the legacy and traditions of Marshall Field’s and we carefully researched customer preferences and studied alternatives before making this decision to incorporate Marshall Field’s into the nationwide Macy’s brand.”
The Marshall Field’s banner dates back to 1852 and has tremendous brand equity, particularly in Chicago, where some had speculated that Federated would keep the department store’s traditional identity.
By cutting costs and consolidating banners to Macy’s and Bloomingdale’s across the country, Federated intends to save $175 million in 2006 and $450 million in 2007.
Federated also plans to sell the Philadelphia-based bridal group it acquired from May. This group includes 245 David’s Bridal stores and 454 After Hours Formalwear stores.
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Report Expects e-Commerce Growth
Cambridge, Mass., As on-line technology continues to flourish, so too will on-line retail sales burgeon. According to Forrester Research, the $172 billion in U.S. on-line retail sales in 2005 will nearly double to $329 billion by 2010.
The 14% compound annual increase of e-commerce mainly can be attributed to retailers’ new approaches to on-line consumers. Rather that seeing on-line stores as a low-cost supplement, retailers now view the e-commerce as a channel to improve customer service and retention.
Several top retailers reflect this growing trend of on-line promotion and improved consumer relations, among them Target, Gap and Nike.
Tesco Team Eyes Albertson’s
London, Reuters reported that Tesco, Britain’s most prominent retailer, sent representatives stateside to consider a bid for Albertson’s, one of America’s top grocery chains.
Despite having 2,500 stores and annual revenues of more than $40 billion, Albertson’s has been facing intense competition from retail powerhouse Wal-Mart. As a result, the grocery chain recently hired investment bankers in order to explore its options on the market.
With a reported price tag of $7.6 billion, Albertson’s seems to have caught Tesco’s eye, at least momentarily. As the British retail giant reports half-year results this week, it continues to look for a way to tap the lucrative U.S. market. Tesco has already begun expanding into eastern Europe and east Asia.
In addition to Britain’s largest—and rapidly expanding—food retailer, France’s Carrefour and Belgium’s Delhaize have expressed interest in Albertson’s. The world’s largest retailer, Wal-Mart, is also courting the grocer.
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