Retail merger excites investors
Federated's plan awaits approval from the Federal Trade Commission.
CINCINNATI -- In a deal that will transform the nation's retailing landscape, Federated Department Stores Inc. -- the owner of Macy's and Bloomingdale's -- came a step closer Wednesday to doubling its size as shareholders overwhelmingly approved the acquisition of May Department Stores Co.
Terry Lundgren, chairman and chief executive officer of Cincinnati-based Federated, said he had not decided whether to change the name of Marshall Field's, a May chain with strong Chicago ties.
That decision will come sometime next year after Federated completes surveys with Midwestern shoppers.
In recent years, Federated has been converting its regional chains to the Macy's or Bloomingdale's name as it seeks to create stronger national brands.
In February, when it announced plans to buy St. Louis-based May, Federated said most of May's regional department stores also would become Macy's. Two possible exceptions to keeping their individual identities were Marshall Field's and Lord & amp; Taylor.
"We're in the market now researching Chicago, Minneapolis and Detroit, talking to customers about the importance of the Marshall Field's name," Lundgren said Wednesday.
It is shoppers in Chicago, however, who are most likely to be sentimental about the name of Field's.
Although Field's is based in Minneapolis, it was founded in Chicago and its flagship store remains on State Street. In contrast, the Field's name was rolled out in Detroit only four years ago, replacing Hudsons.
"Certainly Marshall Field's is a well-known, strong name," Lundgren said. "But the real answer is not with us; it's what customers actually will do and how important it is" for them.
Federated is overseeing "thousands of interviews," which are being conducted by outside firms, to gather "unbiased research," Lundgren said.
"And we're not just learning about names. We're learning about customers and what they want, what level of satisfaction they have."
When Federated researched past potential name changes, it found that workers were more wedded to the monikers than the shoppers were.
Federated will know the results of the Field's research by late fall or "maybe earlier," Lundgren said.
Federated's merchandising strategy won't become visible in May stores, including Field's, until fall 2006, he said.
May bought Field's last year from Target -- beating out a rival bid from Federated. Lundgren said earlier this year he would have pursued May even without Field's. Indeed, Federated and May had talked merger even before Field's was in the mix.
The merger still needs to be approved by the Federal Trade Commission.
The regulator is conducting an antitrust review of the deal, which will create a $30 billion retailer with a widespread presence as an anchor at the nation's shopping malls.
If the merger passes regulatory muster, it is expected to close in Federated's fiscal third quarter.
About 81 percent of Federated's outstanding shares, or 99 percent of votes cast, were in favor of the merger.