Macy's Inc (US)

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Macy's Inc is one of America's biggest and best-known upscale retailers, owner of the renowned fashion and home furnishing stores Macy's and Bloomingdale's. Originally known as Federated Department Stores, the group has gradually consolidated a huge portfolio of regional retail chains to concentrate on just those two store brands. Echoing mergers elsewhere in the US retail industry, it doubled in size in 2005 as a result of the acquisition of mid-market competitor May Department Stores, all of whose local stores converted to the Macy's and Bloomingdale's brands, which previously operated only in New York. The process was completed when Federated Department Stores changed its own corporate name to Macy's Inc in June 2007. Consolidation came just in time to protect the enlarged group from some of the fallout from the economic downturn of the following two years.

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Bloomingdale's ThisIsIt.com

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 12th Jan 2017: Several US physical retailers suffered a grim holiday season, despite the apparently booming economy. Hardest-hit was fashion chain The Limited, which has been struggling to stay afloat for years. This week it announced the closure of all 250 of its remaining stores, though it will continue to trade online for the time being. Macy's said it would lay off more than 10,000 staff, or around 7% of its workforce. More than 6,000 of those redundancies will be of management-level workers. Macy's said no customer-facing jobs were being cut. The store has already announced the closure of 60 stores this year, and almost 40 more over the next three years. As had been widely rumoured in recent weeks, high-end store Neiman Marcus officially withdrew its application to issue an IPO as a result of declining sales and a net loss for its latest quarter, while bookseller Barnes & Noble reported a 9% slump in holiday sales. A solitary ray of sunshine came unexpectedly from Gap Inc's Old Navy chain, which offset the retail gloom with a better than expected same stores increase of 12%. Gap itself generated a lift of only 1%, but that was better that the decline anticipated by investors. Banana Republic, however, did worse than expected, down 7%.

Adbrands Weekly Update 3rd Nov 2016: Ads of the Week: "Old Friends". Watch out John Lewis, there's a new seasonal star in town! BBH New York knocks one out of the park with its debut for Macy's, demonstrating the carefully measured sentimentality that we've come to expect from the US store's British rival, and getting in a few days earlier too. No kids and animals, admittedly, but that makes the skill with which this ad tugs on the heart-strings all the more impressive. BBH NY has tended to live in the shadow of its London parent until now. This fine work suggests that might change.

Adbrands Weekly Update 24th Aug 2016: Macy's named Richard Lennox as its new chief marketing officer, filling a post vacant since Martine Reardon left the company in May. Lennox was previously CMO at Toys R Us.

Adbrands Weekly Update 18th Aug 2016: US retail giant Macy's is to shutter around another 100 of its 728 US stores, on top of 40 already marked for closure, as a result of declining traffic in shopping malls and the shift among consumers towards online. Macy's admitted that most of these stores are more valuable as real estate properties than they are as retail outlets. Analysts welcomed the move, which will help to boost same-store comps.

Adbrands Weekly Update 30th Jun 2016: Macy's longserving CEO Terry Lundgren will step down next year, to be replaced by current president Jeff Gennette. Lundgren will remain chairman for the time being; he has been CEO since 2003.


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Background

Free for all users | see full profile for current activities: Although it is now the dominant brand within the group, Macy's is in fact a comparatively recent addition to the portfolio, only acquired by Federated in 1994. The group was originally was founded in 1929 as the jointly owned holding company for several regional department store retailers, including Abraham & Straus of Brooklyn, Filene's of Boston, F&R Lazarus of Columbus, Ohio and Bloomingdale's of New York, all of whom had originally set up shop between 1850 and 1875. The idea behind Federated was to give these venerable retailers some shared protection from newcomers JC Penney and Sears & Roebuck, the latter a mail order company which had begun pushing aggressively into department stores a few years earlier. Although the Federated stores pooled their finances, they remained in all other respects independent of one another. After World War II, however, the company altered its strategy to take advantage of the post-war boom, restructuring as a single business under the leadership of Fred Lazarus.

As head of F&R Lazarus, Fred Lazarus had already proved himself to be one of the country's most influential retailers. In 1939, he was alarmed to note that the Thanksgiving Holiday was set to occur on the last day on November, thereby reducing the precious selling period between that holiday and Christmas. He personally launched a campaign to fix the holiday permanently on the last Thursday of the month in order to maximise sales potential weekend. That proposal was signed into law by President Roosevelt two years later.

Over the following years the group expanded steadily, opening stores in new cities, and later moving into the new environment of suburban shopping malls. But like its now much larger rivals, Federated was unprepared for the sudden challenge delivered by discount retailers such as Wal-Mart during the 1980s, and profits plunged towards the end of the decade. After a hostile takeover in 1988 by the Campeau Corporation, the group was slimmed down, with several chains, including Foley's and Filene's sold off. But saddled with huge debts from its various past takeovers, Federated's business continued to worsen, and the group filed for bankruptcy in 1990. It was wholly restructured before re-emerging in 1992. Two years later it acquired Macy's. First founded in 1858 by Rowland H Macy as a dry goods store, it became the world's single biggest department store in 1924 (a position it holds to this day), and launched its first Thanksgiving Parade the same year. It too had expanded after the war, but was equally hard hit by the harsher retail environment of the 1980s, and had also filed for bankruptcy in 1989. 

The combined Federated-Macy's business consolidated its operations over the next few years. Having acquired an extensive collection of different brand-name stores since the 1950s, it began pruning its collection, rebranding blocks of stores under a smaller roster of names, such as Bon Marche, Burdines, Rich's, Lazarus and Goldsmith. In 2003 and 2004, these regional stores groups were again rebranded to incorporate the Macy's brand, and their original names were finally phased out during 2005. Also that year, Federated announced plans to acquire smaller rival May Department Stores. The two groups had talked about merger on several occasions since the 1980s, but the latest negotiations were said to have been triggered by the departure of May's chairman & CEO at the end of 2004.

David May established his first store in a mining town in Colorado in 1877, but later moved to St Louis and acquired The Famous Clothing Store. The company's first department store opened in Cleveland in 1898 as The May Company. The business floated in 1910, acquiring William Barr Dry Goods, which was merged with Famous Clothing to become Famous-Barr's. Over the following years, The May Company expanded steadily but slowly. As a a result it was less badly affected by turbulence in the retail market during the 1980s, and took advantage of the environment to double in size with the purchase of Associated Dry Goods in 1986 (including Lord & Taylor, Sibley's, Robinson's, and other retail chains), followed by Foley's and Filene's, acquired from Federated two years later. A string of other smaller acquisitions followed, topped by the purchase of Chicago-based Marshall Field's in 2004 from Target. The group was acquired for around $11.7bn, and the transaction completed in August 2005.

In the Autumn of 2006, Macy's became the star of a new US documentary series, Macy's Unwrapped, billed as a behind-the-scenes look at the nation's best-known department store. See full profile for current activities


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