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Econoblogging
Posted by Stephen Green · 1 March 2005
There's consolodation in the retail world: NEW YORK - "The winner here will be the customer," said Federated Chairman, President and Chief Executive Terry Lundgren of his company's plans for newly acquired May Department Stores. His plans for the combined company, which consists of almost 1,000 stores, include lower prices for consumers--at the expense of suppliers and mall owners--a better selection of merchandise and upsize fitting rooms. What is it that makes some boards think that one big business in the declining field is automatically better than two small ones? Surely, consumers will benefit, but a troubled industry (in this case, department stores) is still a troubled industry. And if you think one big company will more easily weather a storm, just think of the HP/Compaq buyout. Comments
Does anyone shop at Department Stores anymore? I can understand shopping at Nordstroms, because of their reputation for customer service, but the mid-range stores - Hechts, Macy's, Lord and Taylor? Since my Wedding registry, I've had no real need to shop at a Department Store. They're hard to navigate, hard to find customer service, and usually expensive. Posted by: Eric at March 1, 2005 01:53 PMI haven't shopped in one in forever. Women get 2 choices..."Baby Prostitute" clubwear for teens (scary)or "50 and Fabulous" mom-wear (hellno)...and that's even assuming that you have the time to spend FINDING those areas!! Department stores are only good as entry points to the REAL stores. There's a reason Target got out of the department store business, probably several years later that they should have. On the other hand, their sale of Marshall Fields was pretty deft; snookering 3.2 billion from May was several hundred million above value, which is what cost May's chairman his job, leading to this merger with Federated. Of course no merger/snooker will ever compete with AOL/TimeWarner, in which Steve Case performed brilliantly for AOL's stockholders, and convinced TimeWarmer's board to hand over the keys to the company for essentially nothing. Posted by: Will Allen at March 1, 2005 02:28 PMC'mon! This Federated/May consolidation is necessary if they're to counter-balance the new K-Mart/Sears conglomerate. Oh, there's some saying Sears bought K-Mart ... but look who gets more directors on the new board. Sears of course is the retailer that quit the mail order business then turned around and bought Lands' End. K-Mart is the retailer that just two years back was closing failing stores left and right and nearly abandoned Texas and other states entirely -- due largely to the impact of the ad campaigns centered around Martha Stewart and Rosie O'Donnell. This is probably a good time to invest in Dollar General ...
I don't know if Federated can fix what May has broken. I worked at Marshall Field's through the Target-> May conversion and still keep up with some old co-workers, May's focus on value was killing customer service (spending money to train staff on DOWNgraded computer systems is a bad sign). If Federated can shape some of May's stores up to Macy's/Bloomingdale's standards, I can see the company carving out a good niche. Posted by: Gus at March 1, 2005 03:00 PMI despise Tar-jay for what they did to Field's. What a tin ear they have. I agree w/the clothes statement, get some good stuff in and in petite sizes and I'm there. Nordy's petite section is horrible. Lord and Taylor has better prospects than Field's. Posted by: Sandy P at March 1, 2005 03:17 PMIIRC, JC Penney had a really good 2004. Posted by: denise at March 1, 2005 04:11 PMCouple of things: C'est Moi,
Posted by: triticale at March 1, 2005 07:32 PM
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