Federated shuffles Southern stores
January 20, 2003,
The Federated shuffle is coming to the South.
Simultaneously, the company announced plans to enter Atlanta with two Bloomingdale's stores as early as next fall.
The consolidation under a combined Rich's-Macy's nameplate will enable the company to concentrate management resources and capital spending on one brand and key store locations in the Atlanta market, according to James Zimmerman, chairman/ceo.
The announcements were made as the company also warned it would miss Wall Street estimates for its fourth quarter and fiscal year earnings. Federated said it would take a one-time charge of $115 million related to the closings, $70 million of which would be applied to the fourth quarter.
The combined Rich-Macy's nameplate will go up on a total of 28 stores in the Southeast. Among them are the Macy's store at Northlake, GA, as well as Rich's stores in Birmingham, AL; Atlanta, Athens, Augusta, Columbus, Macon and Savannah, GA; and Columbia and Greenville, SC.
Closings will also impact two Lazarus stores, a Goldsmith's and another Macy's, in New Jersey.
"Combining Macy's and Rich's individual merchandising strengths with our exclusive private brands will create a formidable retail offering for our customers," said Terry Lundgren, president/coo.
The announced store closings are expected to reduce net sales by approximately $100 million, after the reopening of the Bloomingdale's stores, according to the company.
Federated has made similar shifts in the past in an effort to control expenses and enhance its market position against competitors, most notably in the Northeast, where it absorbed its Stern's and A&S stores into its Macy's operations.
Atlanta consumers are apparently split on the impact of the consolidation. The Atlanta Journal-Constitution informally polled readers online: 51 percent said the Macy's closures would not be a big blow to shoppers.