Cincinnati, OH, September 14—Federated Department Stores said it will convert all of its regional department stores to the Macy's nameplate.
Starting in January, 184 stores will change their names to Macy's, eliminating the names that many have carried since they were founded generations ago. They will join the 239 stores already operating under the single Macy's brand. The move doesn't impact Federated's Bloomingdale's division.
The stores, which Federated acquired over the years, are Bon-Macy's in the Pacific Northwest, Burdines-Macy's in Florida, Rich's-Macy's in the Southeast, Goldsmith's-Macy's in Tennessee and Lazarus-Macy's in the Midwest. In May, the company launched its first national advertising campaign, bringing all of its regional stores together under one branding effort.
Based on the strong results Macy's has posted so far this year, Federated CEO Terry Lundgren decided the time was right to make the change. "We have two of the greatest names in department store retailing," says Mr. Lundgren. "Our objective is to position Macy's as America's department store."
The biggest advantage of the change is in advertising and marketing where Macy's will gain major efficiencies, Mr. Lundgren says. Rather than customizing TV and print advertising to its individual store chains, the company will be able to launch national marketing that is more far-reaching and cost-effective, he says.
Additionally, operating under one name will give Macy's better leverage in developing exclusive merchandising arrangements with vendors, and in expanding its own private brands, the company said.
But the retailer faces the risk of upsetting customer loyalty that for some has spanned generations. "Certainly there are customers who'd rather have the old name," says Mr. Lundgren. "But hopefully they'll recognize that we'll be able to bring benefits that are loud and clear with the national Macy's name."
To help sweeten the transition, Macy's announced it will roll out a nationwide customer-loyalty program, as well as an improved national gift and bridal registry. It also plans to accelerate the company's "Reinvent" program in these stores, which includes upgrades such as equipping fitting rooms with cable TV and seating, centrally-located checkout counters and bar-code scanners to make pricing easier to understand.
In January, the Macy's brand logo will begin appearing in store advertising and on internal store signs, shopping bags, customer credit cards and employee nametags. Replacing the stores' outdoor signs will begin in January but the process is likely to take several months to complete, the company said.
