Federated takes ‘critical’ aim at home
May 16, 2007,
Cincinnati – To boost its lagging home business and to better woo its customers, Federated Department Stores will shift its advertising approach to include more public media and heavier promotions by late this month.
Hence the call for an emphasis on advertising in “public media rather than direct mail, and our promotions will need to create more urgency in order for these customers to react.”
This effort is “particularly critical” in aiding the company’s home areas, “which tend to be driven most by promotional offerings,” she continued. “Our hope is to improve our home business with promotions and public advertising…. We are hoping these changes will help accelerate the business starting in late May.”
The retailer reported diluted earnings per share from continuing operations of 11 cents for the first quarter of 2007, in contrast to a loss of 13 cents for the year-ago period.
Sales for the quarter were down 0.2% to $5.92 billion, below the company's guidance of $6 billion to $6.1 billion. Federated first-quarter comps edged up 0.6%; projected second-qarter comps will range from flat to up 2%.
“In spite of weak sales, we achieved strong gross margin results and reduction in expense as a percent to sales,” said chairman, president and ceo Terry Lundgren, adding, “We are on track to deliver at least $450 million in annual expense savings as a result of the May Company acquisition.”
One analyst commented on what appears to be a growing push for private label products at Macy’s and a demand from the retailer for higher margins. Hoguet argued that vendors have to produce product that sells and has a good sell-through: “We’re much more focused as we work with vendors on that issue, rather than on having huge increases on gross margin rates.”
Related Content By Author
Live From New York: Fashion Comes Across the Pond
Home & Textiles Today eDaily
Most Viewed Articles
See the September 2017 issue of Home & Textiles Today. In this issue, we look at the Attack of the Killer Third Tier: Monster off-pricers are climbing to the top of the food chain, plus New Products: 40 pages of new products debuting at the New York Home Fashions Market; Home Stores: TJX unveils first U.S. HomeSense store; Clicks to Bricks: Boll & Branch moves from digital to physical retailing; and much more...