Reign of the Red Star

From Flickr user Roadsidepictures (click to enlarge)

The End is Near

It's been a year since Cincinnati-based Federated Department Stores acquired its biggest rival, May Department Stores, in a bid to become a fixture at shopping malls from coast to coast. Billions were spent on the premise that a new "national brand" of department stores would produce growth in a slumping sector that must contend with discounters like Wal-Mart, Target, and Kohl's as well as luxury retailers like Nordstrom, Neiman Marcus, and Saks Fifth Avenue.

However, the true price of the merger has been the end of the "hometown" department store. Though decades of consolidation have made numerous treasured names extinct, May still operated under 12 regional banners when it was purchased. Only one (Lord & Taylor) was spun off into a seperate entity; the other eleven will be consolidated with Macy's on Saturday, September 9.

The Southern California Effect

While Macy's is new to many markets, it has been familiar to Southern California shoppers for nearly a decade. Having absorbed both Bullock's and The Broadway, two legendary Los Angeles retailers, Macy's West is now ready to consume Robinsons-May, a regional chain that was itself a product of retail mergers. At its end, Robinsons-May was nearly identical to May's other regional chains but represented the proud histories of predecessors J.W. Robinson's and The May Company.

The end of Robinsons-May has cost the Southern California region thousands of jobs through the closure of its headquarters and more than two dozen stores. In addition, mall operators are faced with the challenge of replacing vacant "anchor" spots at many of their key properties. Furthermore, all consumers are at a disadvantage because there is one less competitor on the retail scene. Yet the rise of Macy's star in the region has garnered little attention from anyone here in Los Angeles.

Windy City Blues

Chicago appears to be the city most offended by Federated's "national brand." The legendary Marshall Field's, including its landmark building on State Street, are not exempt from September 9. Field's, with operations in Detroit and Minneapolis as well as Chicago, will become Macy's North.

After the "Keep it Field's" Web Site shut down, "Field's Fans Chicago" set up shop to channel the sadness and rage of Chicago residents and other Field's fans nationwide. For many of these folks, the triumph of Macy's, a product of New York City, over the venerated Marshall Field's, synonymous with Chicago for over a century, is a slap in the face to civic pride and retailing history.

Protests are being planned at the State Street store on September 9. Devotees plan to carry Field's iconic green bags but not purchase anything. In light of a recent report that Federated's sales have fallen in markets where it replaced local names with Macy's, the Field's fight is definitely worth watching.

Reign of the Red Star

Come September 9 and the days after, will Federated prove successful in growing the nearly 1,000-unit Macy's chain as a "national brand"? The future of the department store sector hangs in the balance.