Macy Madness
Macy's Headquarters in Cincinnati, Ohio Business Week magazine had an interesting article this week about Macy’s Department Store. Apparently the powers that be have decided that their stores need to be more “local” in character. Its regional managers now have increased autonomy to sell goods tailored to a store’s specific geographic location. For example, you can buy old fashioned coffee percolators on Long Island; boy’s formal wear in Utah; and specific types of candy in Chicago. Gee, isn’t that how it worked before Macy’s took all of the previously local branded department stores national?
Well, not exactly. But the evolution of Macy’s, Inc. is a fascinating story traveling two roads; one of which began in New York City; the other in Columbus, Ohio…and even crossed roads here in Youngstown. There is ALWAYS a Youngstown connection.
The Miracle on 34th Street Macy’s was founded in New York City in 1858 by Rowland Macy. The star in the logo goes back to a tattoo Mr. Macy had on his arm, and has been part of Macy’s image from the beginning. In 1875, Mr. Macy took on some partners. But he died soon after, and eventually the partners sold the operation to Nathan Straus and his brother Isidor Straus of Titanic fame. His wife refused a lifeboat seat if her husband couldn’t go with her, and they went down with the ship snuggling in their stateroom.
Macy’s began its nationwide expansion beginning in the 1920’s with acquisitions stretching from Atlanta to Toledo to San Francisco back to New Jersey…you get the picture. In the 1980’s, Macy’s attempted a leveraged buy-out of Federated Department Stores (see below), but lost the battle to Campeau Corporation of Canada, which was financed by the DeBartolo Corporation of Youngstown. As part of a legal settlement against Campeau…Macy’s ended up purchasing several branches of the Federated chain out west. Things went south…no pun intended, and in 1992, Macy’s filed for bankruptcy.
Federated Department Stores sprung from Lazarus Department Stores founded in Columbus, Ohio, in 1851. The Lazarus family believed in expansion. In the 1920’s, Federated Department Stores was incorporated as a department store holding company based in Cincinnati. It’s association stores included Abraham and Straus, Lazarus, Shillito’s, Burdines, Rikes, I Magnin, and Bullock’s. Oh yes…Bloomingdale’s.
You celebrate Thanksgiving on the 4th Thursday of November because of Mr. Lazarus convinced President Roosevelt it would be good for department store business to extend the Christmas shopping season by a week. (It used to be on the last Thursday of November).
When last we saw Federated (see above), it had been bought out by Campeau of Canada. Campeau then tried to buy Allied Department Stores (partially funded by a $480,000,000.00 loan from the DeBartolo Corporation). The deal ultimately resulted in Federated filing for bankruptcy in 1990…and Campeau was ousted from the Federated "family." There’s that pesky Youngstown connection again.
Long story short, Macy’s emerged from bankruptcy…Federated emerged from bankruptcy. It was a match made in heaven, and the companies merged. Well, they call it a merger, but actually Federated bought Macy’s out. Federated took the Macy’s name, and is how happily headquartered in Cincinnati. Let’s hear it for Ohio. (I bet you thought it was in New York City!)
In 2005, Federated announced that it was purchasing May Department Stores. For those of us in Youngstown, that included the evolving Strouss, Strouss-Kaufmann, the Kaufmann’s local stores. Included in the sale was May Company in Cleveland, Kaufmann’s in Pittsburgh, and Marshall Fields in Chicago. It was trauma city for these folks.
Macy’s decided it was necessary to brand itself nationally, and you can see the results today. Macy’s is holding its own financially. There is obvious savings in running one big national brand instead of 40 local city brands. But as Business Week said, surprise-surprise, we may be connected by computers and the internet…but they still like their percolated coffee on Long Island; and those Mormons like to dress their kids up. Who knows? Maybe some of the old brands will come back. And we will all be the better for it.
One more thing. You may wonder why DeBartolo wanted to get into the retail business. He didn’t. He was tired of anchor department stores dictating to him where to build his malls. So he decided to buy them out. I don't think it worked out the way he intended. On the other hand, it’s only $480,000,000.00. Chump change by the Obama deficits!! I couldn’t resist!!!! Happy Shopping!!
Well, not exactly. But the evolution of Macy’s, Inc. is a fascinating story traveling two roads; one of which began in New York City; the other in Columbus, Ohio…and even crossed roads here in Youngstown. There is ALWAYS a Youngstown connection.
The Miracle on 34th Street Macy’s was founded in New York City in 1858 by Rowland Macy. The star in the logo goes back to a tattoo Mr. Macy had on his arm, and has been part of Macy’s image from the beginning. In 1875, Mr. Macy took on some partners. But he died soon after, and eventually the partners sold the operation to Nathan Straus and his brother Isidor Straus of Titanic fame. His wife refused a lifeboat seat if her husband couldn’t go with her, and they went down with the ship snuggling in their stateroom.
Macy’s began its nationwide expansion beginning in the 1920’s with acquisitions stretching from Atlanta to Toledo to San Francisco back to New Jersey…you get the picture. In the 1980’s, Macy’s attempted a leveraged buy-out of Federated Department Stores (see below), but lost the battle to Campeau Corporation of Canada, which was financed by the DeBartolo Corporation of Youngstown. As part of a legal settlement against Campeau…Macy’s ended up purchasing several branches of the Federated chain out west. Things went south…no pun intended, and in 1992, Macy’s filed for bankruptcy.
Federated Department Stores sprung from Lazarus Department Stores founded in Columbus, Ohio, in 1851. The Lazarus family believed in expansion. In the 1920’s, Federated Department Stores was incorporated as a department store holding company based in Cincinnati. It’s association stores included Abraham and Straus, Lazarus, Shillito’s, Burdines, Rikes, I Magnin, and Bullock’s. Oh yes…Bloomingdale’s.
You celebrate Thanksgiving on the 4th Thursday of November because of Mr. Lazarus convinced President Roosevelt it would be good for department store business to extend the Christmas shopping season by a week. (It used to be on the last Thursday of November).
When last we saw Federated (see above), it had been bought out by Campeau of Canada. Campeau then tried to buy Allied Department Stores (partially funded by a $480,000,000.00 loan from the DeBartolo Corporation). The deal ultimately resulted in Federated filing for bankruptcy in 1990…and Campeau was ousted from the Federated "family." There’s that pesky Youngstown connection again.
Long story short, Macy’s emerged from bankruptcy…Federated emerged from bankruptcy. It was a match made in heaven, and the companies merged. Well, they call it a merger, but actually Federated bought Macy’s out. Federated took the Macy’s name, and is how happily headquartered in Cincinnati. Let’s hear it for Ohio. (I bet you thought it was in New York City!)
In 2005, Federated announced that it was purchasing May Department Stores. For those of us in Youngstown, that included the evolving Strouss, Strouss-Kaufmann, the Kaufmann’s local stores. Included in the sale was May Company in Cleveland, Kaufmann’s in Pittsburgh, and Marshall Fields in Chicago. It was trauma city for these folks.
Macy’s decided it was necessary to brand itself nationally, and you can see the results today. Macy’s is holding its own financially. There is obvious savings in running one big national brand instead of 40 local city brands. But as Business Week said, surprise-surprise, we may be connected by computers and the internet…but they still like their percolated coffee on Long Island; and those Mormons like to dress their kids up. Who knows? Maybe some of the old brands will come back. And we will all be the better for it.
One more thing. You may wonder why DeBartolo wanted to get into the retail business. He didn’t. He was tired of anchor department stores dictating to him where to build his malls. So he decided to buy them out. I don't think it worked out the way he intended. On the other hand, it’s only $480,000,000.00. Chump change by the Obama deficits!! I couldn’t resist!!!! Happy Shopping!!
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