Macy's, Inc. (NYSE: M) is a department store holding company and owner of Macy's and Bloomingdale's department stores. Macy's Inc.'s stores specialize mostly in retail clothing, jewelery, watches, dinnerware, and furniture.
Macy's Inc. is headquartered in Cincinnati, Ohio and operates just over 850 stores in the United States. The company's Macy's locations and related operations account for 90 percent of the company's revenue, while luxury-oriented Bloomingdale's stores and associated ventures represent the balance of the company's business. Macy's is well known for its flagship department stores, most notably in New York, San Francisco, Los Angeles, Boston, the former Dayton's in Minneapolis, the former Kaufmann's in Pittsburgh, the former Burdine's in Miami, the former Wanamaker's in Philadelphia, and the former Marshall Field's location in Chicago and the former Famous Barr in St. Louis.
May Department Stores acquisition
On July 18, 2005, Federated Department Stores announced that they would acquire May Department Stores company for $11 billion in cash and stock. Also part of the buyout was the bridal and formal unit of May, consisting of David's Bridal and After Hours Formalwear. Federated would also assume $6 billion of May's debt, bringing total consideration to $17 billion. The deal would create the nation's largest department store chain with over 1,000 stores and $30 billion in annual sales. To help finance the deal, Federated agreed to sell its combined proprietary credit card business (but still administrated by FACS Group, a subsidiary of Federated) to Citigroup. The merger was completed on August 30, 2005, after an assurance agreement was reached with the State Attorneys General of New York, California, Massachusetts, Maryland and Pennsylvania.
Federated announced plans to sell 80 store locations in 2006, having pledged in its settlement to sell most of them as viable businesses, with preference being given to a group of thirteen competitors. This number could fluctuate pursuant to Federated's negotiations with various mall landlords and its final decision regarding using former Macy locations for its luxury Bloomingdale's operation.
On January 12, 2006, Federated announced its plans to divest May Company's Lord & Taylor division (55 stores in 12 states) by the end of 2006 after concluding that chain did not fit with their strategic focus for building the Macy's and Bloomingdale's national brands. On June 22, 2006, Macy's announced that NRDC Equity Partners, LLC would purchase Lord & Taylor for US$1.2 billion, and completed the sale in October 2006.
On September 9, 2006, May Company division stores Famous-Barr, Filene's, Foley's (the prior two were former Federated stores in their own right), Hecht's, The Jones Store, L. S. Ayres, Marshall Field's, Meier & Frank, Robinsons-May, and Strawbridge's brands ceased to exist as Federated replaced most of them with the Macy's masthead, and a select few converting to the Bloomingdale's brand. The conversion of Marshall Field's in Chicago has been particularly criticized, with many customers boycotting the State Street store and staying away from the emporium in droves. The Chicago Tribune continues to report on the poor reception of Macy's in Chicago. Kaufmann's in Pittsburgh also had a dislike to the change most due to the concern of the local parade run by the store. Other stores like Famous-Barr in St. Louis also disliked the change, but not nearly as much as Marshall Field's.
Downsizing
On Wednesday, February 6, 2008, Terry Lundgren announced the localization strategy and the company's plan to shed 2,550 jobs. This new localization strategy is known as "My Macy's."
Employees of the Macy's North headquarters office in Minneapolis, the Macy's Northwest headquarters office in Seattle, and the Macy's Midwest headquarters office in St. Louis were given pink slips, as Macy's pared its seven regional centers to four. Buyers, accountants and senior executives lost their jobs. About 40 new jobs will be created in May as part of the restructuring.
By 2009, the company expects to save $100 million a year from the cuts.
On February 2, 2009 Macy's said it will cut 7,000 jobs, or 4 percent of its work force, and slash its dividend as it looks to lower expenses. Cincinnati-based Macy's Inc. said the work force reduction includes positions in offices, stores and other locations. The cuts will include some unfilled jobs. "Reducing our workforce is an unfortunate outcome of the current economic environment, and I am frustrated that so many of our people will be unable to move forward with us as we proceed into a very exciting future for Macy’s and Bloomingdale's" said Terry J. Lundgren, chairman, president and chief executive officer. "
Macy's will also begin getting rid of its division structure and integrating its functions into one organization, effective immediately. Macy's central buying, merchandise planning, stores senior management and marketing functions will be located primarily in New York. Corporate-related business functions, such as finance and human resources, will be primarily in Cincinnati. To buy with local consumers in mind, Macy's developed a concept called "My Macy's", in which the buyers and planners all look at what the local consumer base is looking for in their local Macy's store. This will help bring a better sense of branding, sizing and marketing to each Macy's store nationwide.
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