Stern's closing puts focus on Macy's, Bloomies
February 12, 2001-- Home Textiles Today,
CINCINNATI -Federated Dept. Stores has announced the closing of its Stern's division, concentrating its Northeastern presence on its Macy's and Bloomingdale's brands instead. Nineteen of the 24 Stern's locations in New York and New Jersey will be converted to Macy's or Bloomingdale's stores.
According to James Zimmerman, Federated's chairman and ceo, the company's strategy is expected to improve both cash flow and return on investment, while still enabling Federated to achieve its targeted earnings per share of $4.00 to $4.25 in 2001, exclusive of the one-time charges related to the conversion.
Stern's had 1999 sales of $840 million, and real estate totaled 4.796 million square feet. It already is closing two of its stores as previously announced-in Manhattan on 33rd Street and in the Nanuet Mall in Nanuet, NY.
The Stern's locations in Willowbrook and Bridgewater, NJ, will be converted to Bloomingdale's stores. With these two additional locations, Bloomingdale's will have a total of 26 stores in 10 states, with annual sales of more than $1.8 billion.
Seventeen Stern's stores will be converted to Macy's East stores by mid-year and will remain in continuous operation throughout the transition. Macy's plans to remodel the converted locations incrementally over the next few years. These stores will bring Macy's East's store total to 107 stores in 15 eastern states and Puerto Rico, with annual sales of more than $5 billion.
The eight New Jersey stores slated to be converted from Stern's to Macy's are Bergen Mall, Paramus; Preakness Mall, Wayne; Middlesex Mall, South Plainfield; Ledgewood Mall, Ledgewood; South Brunswick Square, South Brunswick; and stores in Jersey City, Woodbridge and West Orange.
In New York, the six locations converted to Macy's are Cross County Mall, Yonkers; Stern's Plaza, Commack; Broadway Mall, Hicksville; and the Stern's stores in Hampton Bays, Flushing and Douglaston.
Although the Stern's locations in Toms River, NJ; Atlantic Terminal, Brooklyn, NY; and South Shore Mall, Bay Shore, NY, will convert to Macy's under terms of the current leases, these stores are being evaluated for possible closure at some point.
The remaining five Stern's stores are expected to be closed and sold. They are in Sunrise Mall, Massapequa, NY; Smith Haven Mall, Lake Grove, NY; Roosevelt Field, Garden City, NY; and stores in Monmouth, NJ, and Valley Stream, NY.
Stern's has a total of 7,400 employees in its stores and its Paramus, NJ, corporate offices. Approximately 4,800 employees in the 17 store locations slated to convert to Macy's will retain their current positions and transfer to Macy's payroll. The remaining employees, including the ones in the two stores to convert to the Bloomingdale's format, will receive priority consideration for open positions in Federated's New York-area divisions.
Stern's executives Ron Klein, chairman, and James Andress, president, will work in conjunction with Federated and division managements to facilitate the store conversions, and Federated said it expects to announce in the near future new assignments for both men.
Stern's was founded as a one-room dry goods store called Stern Brothers in 1867 on Sixth Avenue in Manhattan.
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