Professor
01-04-2007, 12:44 AM
Source: http://www.chicagotribune.com/news/nationworld/chi-0701030050jan03,1,5005959.story?ctrack=1&cset=true
Marshall Field die-hard customers will NOT be enticed.
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Macy's learning it's what's in a name
--------------------
By Robert Manor, Tribune staff reporter; Tribune staff reporter Susan
Chandler contributed to this report
January 3, 2007
After a tough first Christmas under a new moniker, Macy's is changing
leadership at the legendary former Marshall Field's flagship store on
State Street.
While shifts in retail aren't unusual, the timing of the shake-up at
the State Street store is crucial.
Wall Street is concerned that the loss this fall of some longstanding
retail names such as Field's in the changeover of some 400 stores to
Macy's by parent company Federated Department Stores Inc. has hurt sales
at some locations.
Now the task of getting shoppers into Macy's on State Street falls on
Linda Piepho, a veteran retailing executive with rival Lord & Taylor who
has spent many years in Chicago.
Piepho takes over Feb. 9 as vice president and general manager of the
former Field's store.
She succeeds Ralph Hughes, a well-regarded manager who becomes regional
vice president of corporate communications for Federated, a new post.
Executives at Macy's, which wasted little time announcing the moves
following the key holiday shopping season, say that the change has nothing
to do with sales at the store. But it comes after the company
acknowledged last month that it needed to find more ways to lure former Field's
shoppers following the company's move to convert the 60 former Field's
stores to Macy's in September.
And consultants say that the State Street location is an obvious choice
for change mainly because it was the focal point of much of the shopper
anger in September when the 154-year-old Field's name came down in
favor of Macy's in Chicago and elsewhere across the Midwest.
"We're trying to find the people that were customers and didn't come
back," Frank Guzzetta, chairman of Macy's North division, told the
Tribune last month.
So Federated ran newspaper ads in Chicago, Detroit and Minneapolis
reminding shoppers that Macy's still carries merchandise found at Field's,
such as Frango mints and Waterford crystal.
And it took the unusual step of calling and mailing letters to
customers who hadn't been shopping the store since it became Macy's.
Analysts last month also began downgrading Federated's stock, after
estimating that sales were declining at the former May Department Stores,
including Field's stores, that had changed over to Macy's in
Federated's move to consolidate its department stores under one name nationwide.
Federated operates about 850 stores under the names Macy's and
Bloomingdale's.
"The key issue we are facing is that management miscalculated the
impact of these changes and, potentially, the pace required to successfully
execute them without seeing a big drop-off in the business," Banc of
America Securities analyst Dana Cohen wrote in a report last month.
Cohen estimated last month that the sales at the former May stores have
declined between 7 percent and 11 percent from the same period a year
ago since the September name conversion and fell 11 percent in November.
Because the State Street store is such a destination spot for suburban
shoppers and tourists, Federated has much at stake in trying to draw
customers back to the iconic department store.
If it can get shoppers there, analysts say it will help get shoppers in
the stores elsewhere in the region.
Consultants weren't surprised by the shake-up.
"It makes sense they would change the manager," said Chicago retail
consultant Keven Wilder. "There's been so much turmoil there. They had to
do something."
Wilder lives across the street from the store and cuts through it
almost daily.
During the lead-up to Christmas, "You could shoot a cannon through
there most of the time," she said.
She doesn't fault the store's employees, who were "really doing a
fabulous job and making an effort to get people to come back." But Wilder
believes the storied State Street flagship bore the brunt of much of the
resentment about Macy's decision to do away with the Field's name.
If Federated wants to win back those disgruntled shoppers, it should
hold focus groups among loyal Field's shoppers and listen to their
complaints. "That would be a big start," she said.
A Chicago-area native, Piepho, 45, spent 23 years with Lord & Taylor,
previously as manager of the New York flagship store. She also headed up
the Lord & Taylor at Water Tower Place from 1998-2004.
So far, Piepho, whose mother once worked at the State Street Field's
store, won't say what her plans are other than to concentrate on
improving sales and focus solely on operations.
In his new post, Hughes will remain focused on ingraining Macy's into
the community, including working on community and government relations.
He has been a critical liaison with Mayor Richard Daley, who previously
named him to head the State Street Commission.
In an interview Tuesday, Hughes said that "Marshall Field's spent a lot
of time, effort and money in the community, but people started to drift
away."
But he noted that the changing nature of State Street works to Macy's
advantage, saying that the area is growing increasingly residential, and
the theater district and universities attract crowds.
"The real opportunity for us is Millennium Park," Hughes said, because
it has become a major draw for visitors.
Still, analysts say that Federated has much work to do in fixing a
number of problems with the stores that were acquired in the deal with May
in 2005.
"Federated is left with a very big job to enhance their physical
plant," said Howard Davidowitz, chairman of Davidowitz & Associates, a retail
consultant and investment-banking firm.
Still, others believe that it's just a matter of time before customers
are won over.
"In our view, Federated will need good execution of regional
merchandising and better customer service to retain loyal customers of former May
stores at Macy's rebranded locations," Standard & Poor's analyst Jason
Asaeda told investors last month.
"We think Federated will succeed," he said.
----------
rmanor@tribune.com
Copyright (c) 2007, Chicago Tribune
Marshall Field die-hard customers will NOT be enticed.
--------------------
Macy's learning it's what's in a name
--------------------
By Robert Manor, Tribune staff reporter; Tribune staff reporter Susan
Chandler contributed to this report
January 3, 2007
After a tough first Christmas under a new moniker, Macy's is changing
leadership at the legendary former Marshall Field's flagship store on
State Street.
While shifts in retail aren't unusual, the timing of the shake-up at
the State Street store is crucial.
Wall Street is concerned that the loss this fall of some longstanding
retail names such as Field's in the changeover of some 400 stores to
Macy's by parent company Federated Department Stores Inc. has hurt sales
at some locations.
Now the task of getting shoppers into Macy's on State Street falls on
Linda Piepho, a veteran retailing executive with rival Lord & Taylor who
has spent many years in Chicago.
Piepho takes over Feb. 9 as vice president and general manager of the
former Field's store.
She succeeds Ralph Hughes, a well-regarded manager who becomes regional
vice president of corporate communications for Federated, a new post.
Executives at Macy's, which wasted little time announcing the moves
following the key holiday shopping season, say that the change has nothing
to do with sales at the store. But it comes after the company
acknowledged last month that it needed to find more ways to lure former Field's
shoppers following the company's move to convert the 60 former Field's
stores to Macy's in September.
And consultants say that the State Street location is an obvious choice
for change mainly because it was the focal point of much of the shopper
anger in September when the 154-year-old Field's name came down in
favor of Macy's in Chicago and elsewhere across the Midwest.
"We're trying to find the people that were customers and didn't come
back," Frank Guzzetta, chairman of Macy's North division, told the
Tribune last month.
So Federated ran newspaper ads in Chicago, Detroit and Minneapolis
reminding shoppers that Macy's still carries merchandise found at Field's,
such as Frango mints and Waterford crystal.
And it took the unusual step of calling and mailing letters to
customers who hadn't been shopping the store since it became Macy's.
Analysts last month also began downgrading Federated's stock, after
estimating that sales were declining at the former May Department Stores,
including Field's stores, that had changed over to Macy's in
Federated's move to consolidate its department stores under one name nationwide.
Federated operates about 850 stores under the names Macy's and
Bloomingdale's.
"The key issue we are facing is that management miscalculated the
impact of these changes and, potentially, the pace required to successfully
execute them without seeing a big drop-off in the business," Banc of
America Securities analyst Dana Cohen wrote in a report last month.
Cohen estimated last month that the sales at the former May stores have
declined between 7 percent and 11 percent from the same period a year
ago since the September name conversion and fell 11 percent in November.
Because the State Street store is such a destination spot for suburban
shoppers and tourists, Federated has much at stake in trying to draw
customers back to the iconic department store.
If it can get shoppers there, analysts say it will help get shoppers in
the stores elsewhere in the region.
Consultants weren't surprised by the shake-up.
"It makes sense they would change the manager," said Chicago retail
consultant Keven Wilder. "There's been so much turmoil there. They had to
do something."
Wilder lives across the street from the store and cuts through it
almost daily.
During the lead-up to Christmas, "You could shoot a cannon through
there most of the time," she said.
She doesn't fault the store's employees, who were "really doing a
fabulous job and making an effort to get people to come back." But Wilder
believes the storied State Street flagship bore the brunt of much of the
resentment about Macy's decision to do away with the Field's name.
If Federated wants to win back those disgruntled shoppers, it should
hold focus groups among loyal Field's shoppers and listen to their
complaints. "That would be a big start," she said.
A Chicago-area native, Piepho, 45, spent 23 years with Lord & Taylor,
previously as manager of the New York flagship store. She also headed up
the Lord & Taylor at Water Tower Place from 1998-2004.
So far, Piepho, whose mother once worked at the State Street Field's
store, won't say what her plans are other than to concentrate on
improving sales and focus solely on operations.
In his new post, Hughes will remain focused on ingraining Macy's into
the community, including working on community and government relations.
He has been a critical liaison with Mayor Richard Daley, who previously
named him to head the State Street Commission.
In an interview Tuesday, Hughes said that "Marshall Field's spent a lot
of time, effort and money in the community, but people started to drift
away."
But he noted that the changing nature of State Street works to Macy's
advantage, saying that the area is growing increasingly residential, and
the theater district and universities attract crowds.
"The real opportunity for us is Millennium Park," Hughes said, because
it has become a major draw for visitors.
Still, analysts say that Federated has much work to do in fixing a
number of problems with the stores that were acquired in the deal with May
in 2005.
"Federated is left with a very big job to enhance their physical
plant," said Howard Davidowitz, chairman of Davidowitz & Associates, a retail
consultant and investment-banking firm.
Still, others believe that it's just a matter of time before customers
are won over.
"In our view, Federated will need good execution of regional
merchandising and better customer service to retain loyal customers of former May
stores at Macy's rebranded locations," Standard & Poor's analyst Jason
Asaeda told investors last month.
"We think Federated will succeed," he said.
----------
rmanor@tribune.com
Copyright (c) 2007, Chicago Tribune