Macy's, Inc. headquarters
|Federated Department Stores, Inc. (1929-2007)|
|Founded||1929 in Columbus, Ohio|
Number of locations
|871 (Q3 2019)|
(Chairman and CEO)
|Revenue||US$24.971 billion (FY Feb 2019)|
|US$1.738 billion (FY Feb 2019)|
|US$1.098 billion (FY Feb 2019)|
|US$19.194 billion (FY Feb 2019)|
|US$6.436 billion (FY Feb 2019)|
Number of employees
|~130,000 (February 2019)|
Macy's, Inc. (originally Federated Department Stores, Inc.) is an American holding company founded by Xavier Warren in 1929. Upon its establishment, Federated held ownership of the regional department store chains Abraham & Straus, Lazarus, Filene's, and Shillito's. Bloomingdale's joined Federated Department Stores the following year. Throughout its early history, frequent acquisitions and divestitures saw the company operate a number of nameplates. In 1994, Federated took over the department store chain Macy's. With the acquisition of The May Department Stores Company in 2005, the regional nameplates were retired and replaced by the Macy's and Bloomingdale's brands nationwide by 2006. Ultimately, Federated itself was renamed Macy's, Inc. in 2007.
Macy's, Inc. is headquartered in Cincinnati, Ohio. It operates the subsidiaries Macy's, Bloomingdale's, and the beauty store chain Bluemercury, all of which have a flagship store located in the New York City borough of Manhattan. As of November, 2019, the company operated 871 stores in the United States, Guam, and Puerto Rico. Its namesake locations and related operations account for 90% of its revenue. According to Deloitte, Macy's, Inc. is the world's largest fashion goods retailer and the 36th largest retailer overall, based on the company's reported 2010 retail sales revenue of $25 billion (equivalent to $29.3 billion in 2019).
Federated Department Stores traces its corporate lineage to F&R Lazarus & Company, founded in Columbus, Ohio, in 1851. On November 25, 1929, Federated was founded by Xavier Warren in Columbus as a department store holding company for Lazarus (including its Cincinnati division, then known as Shillito's), Abraham & Straus, and William Filene's Sons of Boston. In 1930, Bloomingdale Brothers of New York joined.
In the mid-1930s, a modern merchandising standard was set when Fred Lazarus Jr. arranged garments in groups of a single size with a range of style, color and price, basing the technique upon observations made in Paris. As well, Lazarus convinced President Franklin D. Roosevelt that it would help American economy to change the Thanksgiving holiday from the last Thursday of November to the fourth Thursday, thus extending the Christmas shopping season. An act of Congress perpetuated the arrangement in 1941. Black Friday became a nationwide sensation and the most profitable day for Federated. (Lazarus Jr. worked at Federated until he died in 2013, the last remaining family member with an official role at the company.)
In 1945, Federated moved its corporate offices to Cincinnati. The latter half of the 20th century saw the company expand nationwide, adding Rike Kumler of Dayton, Ohio (merged into Shillito's in the 1980s to become Shillito-Rike's); Burdines of Miami, Florida; Rich's of Atlanta, Georgia; Foley's of Houston, Texas; Sanger Brothers and A. Harris, both of Dallas, Texas (which was merged with Sanger Brothers to form Sanger-Harris); Boston Store of Milwaukee, Wisconsin; MainStreet of Chicago, Illinois; Bullock's, of Los Angeles; I. Magnin, of San Francisco, California; Gold Circle; and Richway Discount Department Stores of Worthington, Ohio. Federated entered the supermarket industry in 1968 when it acquired the Ralphs chain based in Southern California. In 1982, Federated acquired the Twin Fair, Inc. discount store chain based in Buffalo, New York, and merged it with Gold Circle. In 1983, Federated sold four shopping center properties to JMB Realty.
Federated was taken over by Robert Campeau, a Canadian real estate developer, in 1988. Two years later, Federated filed for bankruptcy after Campeau failed to refinance the debt of Federated and Allied Stores Corp. In 1992, Campeau was ousted and Federated emerged from bankruptcy as a new public company. As part of the reorganization, Federated sold the Ralphs chain to a group of owners led by Edward J. DeBartolo Corporation. That same year, Macy's declared bankruptcy; Federated acquired it two years later. Federated began selling goods online in 1998, rather later than most contemporary large retailers; Federated ran a private bank, FDS Bank, which issued and maintained the majority of its own consumer credit card portfolio, was one of the last credit card banks to begin to allow its cardholders to access account information online (around 2004). The department store chain Stern's, a division of Federated, ceased operations in 2001 and most of its stores became Macy's stores. In 2003, Federated changed the nameplates of almost all their non-Macy's stores -- the lone exception was Bloomingdales -- to include the Macy's name, a rebranding internally dubbed Project Hyphen. For example, Seattle-based The Bon Marché became Bon-Macy's; Goldsmith's in Tennessee became Goldsmith's-Macy's; Lazarus, Burdines, and Rich's also added "-Macy's" to their name. A year later, the hyphenated names were changed to simply Macy's, a rebranding process referred internally to as Project Star.
In 1998, Federated settled an SEC investigation for $14.46 million (equivalent to $22.7 million in 2020) due to unethical debt-collection practices. Federated routinely forced credit card holders/debtors to sign an agreement that legally bound them to repay their outstanding balances instead of having the unsecured debt discharge via the filing of bankruptcy. Federated failed to file reaffirmation agreements with bankruptcy courts. As a result, the changes in the agreements were not legally binding.
In 2001 Federated acquired Liberty House of Hawaii as it emerged from Chapter 11 bankruptcy. It was managed as part of Macy's West and all the store names were changed to Macy's.[circular reference]
On July 18, 2005, Federated Department Stores announced that it would acquire May Department Stores company for $11 billion (equivalent to $14.4 billion in 2020) in cash and stock. Also part of the buyout was the bridal and formal unit of May, consisting of David's Bridal and After Hours Formalwear. Federated would also assume $6 billion (equivalent to $7.85 billion in 2020) of May's debt, bringing total consideration to $17 billion (equivalent to $22.3 billion in 2020). The deal would create the nation's largest department store chain with over 1,000 stores and $30 billion (equivalent to $39.3 billion in 2020) in annual sales. To help finance the deal, Federated agreed to sell its combined proprietary credit card business (but still administered by FACS Group, a subsidiary of Federated) to Citigroup. The merger was completed on August 30, 2005, after an assurance agreement was reached with the Attorneys General of New York, California, Massachusetts, Maryland and Pennsylvania.
As a result of the merger, Federated also in the process reacquired two of their former department store chains Foley's & Filene's (Which Federated originally sold to May Company), putting them back under the Federated Department Stores corporate umbrella for the first time since 1988.
Federated announced plans to sell 80 store locations in 2006, having pledged in its settlement to sell most of them as viable businesses, with preference being given to a group of thirteen competitors. This number could fluctuate pursuant to Federated's negotiations with various mall landlords and its final decision regarding using former Macy locations for its luxury Bloomingdale's operation.
On January 12, 2006, Federated announced its plans to divest May Company's Lord & Taylor division (48 stores in 12 states) by the end of 2006 after utilizing prime and conflicting real estate by closing and converting several locations. On June 22, 2006, Macy's announced that NRDC Equity Partners, LLC would purchase Lord & Taylor for US$1.2 billion (equivalent to $1.52 billion in 2020), and completed the sale in October 2006.
On September 9, 2006, the former May Company store names Famous-Barr, Filene's, Foley's, Kaufmann's, Hecht's, The Jones Store, L. S. Ayres, Marshall Field's, Meier & Frank, Robinsons-May, and Strawbridge's disappeared as Federated switched most of them to the Macy's masthead and a few to the Bloomingdale's name. The conversion of Marshall Field's in Chicago was particularly criticized, with many customers boycotting its historic State Street flagship store. The Chicago Tribune continues to report on the poor reception of Macy's in Chicago. Pittsburgh customers also strongly resisted the name change from Kaufmann's, in part because of the Kaufmann family role in Pittsburgh history, as well as the central store's Christmas windows and holiday parade.
One of the consequences of this rebranding is that several malls have two Macy's stores. In downtown Boston, Federated liquidated an acquired Filene's because it already had a Macy's (formerly a Jordan Marsh) across the street. The two stores have a combined floorspace of more than 1,400,000 square feet (130,000 m2), more than two-thirds the size of Macy's New York City flagship store.
On February 27, 2007, Federated announced that its board of directors would ask shareholders to change the company's name to Macy's Group, Inc. By March 28, the company revised its plans for the new name, opting to eventually become Macy's, Inc. Federated shareholders approved the revised proposal during the company's annual meeting on May 18, 2007. The company was previously known as Federated Retail Holdings, Inc.
The name took effect on June 1, 2007. Reasoning for the proposed name change, according to Terry Lundgren, Federated's chairman, president and chief executive officer -- hinges on the large-scale conversions throughout the company toward the Macy's nameplate. "Today, we are a brand-driven company focused on Macy's and Bloomingdale's, not a federation of department stores," Lundgren said in the company's press release heralding the proposed name. Upon the change to Macy's Inc., Federated's stock ticker symbol on the New York Stock Exchange changed from "FD" to "M", making the new Macy's Inc. one of a handful of single-letter ticker symbol companies.
In April, 2008, Moody's Investors Service said that it may downgrade Macy's Inc. bonds to just above junk status. That same month, Fitch Ratings downgraded their ratings to BBB- from BBB, noting a deterioration in the company's operating and credit metrics. A rating of BBB- is one notch above junk status.
On Wednesday, February 6, 2008, Terry Lundgren announced the localization strategy and the company's plan to shed 2,550 jobs. This new localization strategy is known as "My Macy's."
Employees of the Macy's North headquarters office in Minneapolis, the Macy's Northwest headquarters office in Seattle, and the Macy's Midwest headquarters office in St. Louis were given pink slips, as Macy's pared its seven regional centers to four. About 40 new jobs were to be created in May as part of the restructuring. By 2009, the company expected to save $100 million (equivalent to $119 million in 2020) a year from the cuts.
On February 2, 2009, Macy's announced the elimination of 7,000 jobs, or 4% of its work force, and slashed its dividend as it looked to lower expenses as part of major restructuring. Cincinnati-based Macy's Inc. said the work force reduction includes positions in offices, stores and other locations. The cuts will include some unfilled jobs. "Reducing our workforce is an unfortunate outcome of the current economic environment, and I am frustrated that so many of our people will be unable to move forward with us as we proceed into a very exciting future for Macy's and Bloomingdale's" said Terry J. Lundgren, chairman, president and chief executive officer. "
Macy's also got rid of its division structure and integrated its functions into one organization. Macy's central buying, merchandise planning, stores senior management and marketing functions merged to its New York City corporate office (formerly Macy's East). Corporate-related business functions, such as finance and human resources, will be primarily in Cincinnati. To buy with local consumers in mind, Macy's developed a concept called "My Macy's", in which the buyers and planners all look at what the local consumer base is looking for in their local Macy's store. This will help bring a better sense of branding, sizing, and marketing to each Macy's store nationwide.
Macy's Inc. decided to close the Bloomingdale's at the Mall of America in Minnesota. Since 1994, Bloomingdale's had been one of the 4 anchor stores of the mall, and will be replaced with a $30 million renovation with four new foreign clothing stores.
On October 14, 2013, Macy's Inc. announced the decision to open most of their stores for the first time on Thanksgiving Day 2013, breaking a long-standing tradition of 155 years, and joined the ranks of retailers who created Gray Thursday the year before. Its doors opened at 8 p.m. (local time) on the holiday evening, and remained open for 24 hours straight until the close of business on Friday, which is usually about 10 p.m.
As of February 2014, Macy's Inc. is valued at US$28 billion.
In September 2015 Macy's announced it would close 40 stores, 5% of its total stores in early 2016. It also announced plans to open 6 additional Macy's Backstage locations. From 2010 to 2015, Macy's had closed 52 stores and opened 12.
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|# of locations|
|Bloomingdale's||1860||1930||38 + 19 Bloomingdales the Outlet stores|
|Macy's||1858||1994||636 + 7 stand-alone Backstage stores|
|Name||Founded||Defunct||Operated by Federated||Previous names||Notes|
|A. Harris and Company||1887||1961||1961||Merged with Sanger Brothers to form Sanger-Harris|
|Abraham & Straus||1865||1995||1929-1995||Folded into Macy's|
|The Bon Marché||1890||2005||1992-2005||The Bon Macy's (2003-2005)||Folded into Bloomingdale's and Macy's|
|Boston Store||1897||2018||1948-1985||Sold to Maus Frères, owner of Bergner's in 1985, which was renamed Carson Pirie Scott 1993, then to Proffitt's in 1998, which was renamed Saks, Inc., and to The Bon-Ton in 2006.|
Returned as an online retailer owned by CSG Generation in September 2018, after The Bon-Ton went out of business in August of that year.
|Bullock's||1901||1996||1995-1996||Folded into Macy's|
|Burdines||1896||2005||1956-2005||Burdines-Macy's (2003-2005)||Folded into Macy's|
|The Emporium||1896||1996||1995-1996||Folded into Macy's|
|Famous-Barr||1911||2006||2005-2006||Folded into Macy's|
|Filene's||1881||2006||1929-1988, 2005-2006||Folded into Macy's|
|Foley's||1900||2006||1947-1988, 2005-2006||Folded into Macy's|
|Gold Circle||1967||1988||1967-1988||Liquidated in 1988|
|Goldsmith's||1870||2005||1959-2005||Goldsmith's-Macy's (2003-2005)||Part of Rich's division|
Folded into Macy's
|Hecht's||1857||2006||2005-2006||Folded into Bloomingdale's and Macy's|
|I. Magnin||1876||1994||1964-1987, 1994||Folded into Macy's|
|The Jones Store||1887||2006||2005-2006||Part of Famous-Barr division|
Folded into Macy's
|Jordan Marsh||1841||1996||1988-1996||Folded into Macy's|
Had a separate division in Florida called Jordan Marsh Florida, which was folded into Burdines in 1991.
|Kaufmann's||1871||2006||2005-2006||Part of Filene's division|
Folded into Macy's
|L. S. Ayres||1872||2006||2005-2006||Part of Famous-Barr division|
Folded into Macy's
|Lazarus||1851||2005||1929-2005||Lazarus-Macy's (2003-2005)||Part of Rich's division|
Folded into Macy's
|Lord & Taylor||1826||N/A||2005-2006||Sold to NRDC Equity Partners|
|Maas Brothers||1886||1991||1988-1991||Folded into Burdines|
|MainStreet||1983||1988||1983-1988||Sold to Kohl's|
|Marshall Field's||1852||2006||2005-2006||Folded into Bloomingdale's and Macy's|
|Meier & Frank||1852||2006||2005-2006||Part of Robinsons-May division|
Folded into Macy's
|Rich's||1867||2005||1976-2005||Rich's-Macy's (2003-2005)||Folded into Bloomingdale's and Macy's|
|Richway||1968||1988||1976-1988||Folded into Gold Circle (Charlotte, North Carolina stores rebranded to Gold Circle, all others remained Richway))|
|Rike's||1853||1982||1959-1982||Merged with Shillito's to form Shillito-Rike's|
|Robinsons-May||1993||2006||2005-2006||Folded into Bloomingdale's and Macy's|
|Sanger Brothers||1868||1961||1951-1961||Merged with A. Harris and Company to form Sanger Harris|
|Sanger-Harris||1961||1987||1961-1987||Folded into Foley's|
|Shillito's||1830||1982||1929-1982||Merged with Rike's to form Shillito-Rike's|
|Shillito-Rike's||1982||1986||1982-1986||Folded into Lazarus|
|Strawbridge's||1868||2006||2005-2006||Part of Hecht's division|
Folded into Macy's
|Stern's||1867||2001||1988-2001||Folded into Bloomingdale's and Macy's|