Sometimes it’s important to respect traditions and follow conventional morality even when it doesn’t seem to make logical sense on the surface. Consider, for example, Macy’s recent travails.
The retail giant bought numerous other stores in the past couple of years and decided to change all their names to Macy’s, to strengthen the corporate identity. Macy’s also reduced service and merchandise quality at the stores.
That’s exactly the type of crude corporate behavior one sees in old movies (and many new ones as well).
The effort backfired badly.
Sales are down, and Macy’s investment rating has been lowered.
As the Chicago Tribune reports,
The shock of Federated Department Stores CEO Terry Lundgren’s decision to eliminate beloved names such as Marshall Field’s, Kaufmann’s and Famous-Barr is proving a more difficult and time-consuming fight than expected for Macy’s owner, wrote analyst Dana Cohen at Banc of America Securities.
Cohen estimated that sales plunged 11 percent in November from a year earlier at Field’s and the other former May department stores, all now Macy’s.
Another analyst, Carol Levenson of Gimme Credit, has put the stores’ sales decline at anywhere from 20 percent to more than 30 percent for the three months that ended Oct. 28. . . .
Cohen cited a "sharp reduction" in the cadence of promotions at the new Macy’s stores; "dramatic" changes in merchandise assortments; a lack of compelling marketing, and "not enough change in the store environment and service levels."
"Federated tried to do too much too quickly" at Field’s and the other department store chains previously owned by May Department Stores, Cohen wrote in a report to investors.
Chicagoans are increasingly bitter at what they see as lower levels of merchandise and customer service at Macy’s compared with Field’s.
Cohen sees no upturn in the fortunes of the newly minted Macy’s stores until spring at the earliest, but she believes Federated’s executives will turn things around eventually.
Doing right usually works best, in the business world as anywhere else, and adopting a servant’s mentality is still the surest way to make a fortune. As George Gilder has brilliantly noted, business starts with giving, not taking. When Macy’s starts giving better service and values and considering its customers’ desires before its corporate strategies, things will turn around—and not until then
I went past the downtown Chicago Marshall Field’s last week in a taxi and noticed that the old name was still on the store but Macy’s was added. Appreantly they hadn’t gotten around to removing the old name. That seems the worst possible option. Dumb.
Field’s used to be a destination place for Chicago Christmas shoppers, because of the festive atmosphere and impressive displays in the street windows. There would be crowds standing before the windows all the time. When I went past Field’s last week, nobody was standing there. Now it’s just a store.
I have no doubt that Macy’s will recover from this, but what an unnecessary and culturally stupid thing they’ve done.
I’m surprised their sales aren’t down further, although I suppose some of the sales are in stores that have been “Macy’s” for a long time.
I for one would be ashamed to set foot in one of the Marshall Field’s stores that’s had its proud name ripped off the front and replaced with that of the occupying force. I used to shop there all the time. Never again.
SN, this happened here in the Boston area where Macy’s bought first Jordan Marsh & then Fliene’s, two stores w/a long history in New England. Frankly, it felt like this area was turning into a colony of NYC. I totally agree w/your first comment.
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