Federated sinking more into home
Home & Textiles Today Staff -- Home Textiles Today, May 12, 2004
CINCINNATI — The full benefits of Federated Department Stores’ streamlined Macy’s Home buying division won’t really take hold until fall 2005, the company said during its quarterly analyst call today.
"The biggest impact of this reorganization is going to be sales and gross margins," said Karen Hoguet, chief financial officer.
She emphasized that the reorganization is not an expense-reduction strategy, adding that any costs savings will be reinvested in the Macy’s home operation. Specifically, she pointed to investments in sales specialists and stock-keeping functions.
In addition, she said, beginning in 2005, Federated will invest "a good portion" of the capital expenditures it has been dedicating to its reinvent refurbishing program into the home department.
"Plans for that are still being developed," she said. Federated has no plans to expand the footprint for home, she added, although the company may reallocate space within the department.
For the first quarter, Federated Department Stores Inc. more than doubled first-quarter profits, pushing earnings up 108.7 percent, to $96 million from $46 million a year ago.
Sales at the parent of Bloomingdale's and Macy's improved 6.9 percent, to $3.5 billion form $3.3 billion last year. Getting the year off to a strong start, same-store sales also increased 6.9 percent.