What do Skoda, Seat, Bentley, Bugatti, Audi, Lamborghini, and Porsche have in common? They are all designed, assembled and owned by Volkswagen, a major car brand in its own right. What do Ben and Jerry's, Bertolli, Country Crock, Knorr, Lipton, Popsicle, Ragu, Slim Fast, and Wish Bone all have in common? They all reside in Unilever's enormous stable of consumer goods. What do Guiness, Tanqueray, Johnny Walker, Bailey's, Jose Cuervo, Ciroc, Captain Morgan, Seagram's and Goldschalger have in common? Diageo or its subsidiaries distills and brews them all. Filene's (the non-basement portion, Shillito's, Burdine's, Rich's, Foley's, Sanger Brothers, Boston Store, MainStreet, Marshall Field's, I Magnin, Macy's, Bloomingdale's, Famous-Barr, Strawbridge's, Hecht's, The Jones Store, Robinsons-May, Meier and Frank, and Kaufmann's? Since 2005, these stores have all been owned and operated by Federated Department Stores, better known since 2007 as Macy's, Inc.
I became interested in brands and the companies behind them when I noticed that the head of one of the minor global car companies (isn't that a crazy thing to say? But still Fiat is both global and minor compared to other global car giants) said that he expected only six car companies to be able to survive in a fully globalized car world. I was immediately interested in finding out how many car companies there actually were and discovered that there were really about sixteen major global car companies that make more than a million vehicles a year underneath all of the brand names we know (Toyota, General Motors, Volkswagen, Ford, Honda, Hyundai, PSA Citroen, Nissan/Renault, Fita, Suzuki, Daimler, Chana, BMW with Mazda, Chrysler, Mitsubishi nudging that number, but distinctly under it, if you are interested, I know I was). Since then, I have constantly been on the lookout for the information underneath the brand.
There are many reasons for the consolidation of the companies behind the brands and it's a process that has been in full swing since the 1990s at least. I wish I had the time and resources to explore the process that has led to the current landscape. I say that because the current state of the department store has a very interesting history. The most interesting to me is that the company you know as Macy's, the one that's been turning iconic department stores the country over into Macy's at a breakneck pace since 2005, isn't precisely Macy's. Sure, the stock ticker symbol is a nice big M and all of those stores call themselves Macy's (even if it's really, say, Marshall Field's). But it used to be called Federated Department Stores, a department store holding company founded in the glamorous city of Cincinnati, OH. They owned a number of famous stores, including Filene's (the upstairs part, the basement part has long since been spun off), Lazarus, and Foley's. FDS had some problems with takeovers in 1990, emerged from bankruptcy in 1992 and bought Macy's in 1994, just after Macy's finished it's brush with death. So, Federated has owned Macy's since 1994. In a huge buyout in 2005, they bought the May Department Stores, which included Kaufmann's, Hecht's, as well as Foley's and Filene's, stores they had bought off of Federated in the 1980's, and Marshall Field's (though May only owned Field's for a year). Following that merger, FDS bgean transforming every store in their stable to either Macy's or Bloomingdale's, the flashier half of Macy's and completed the transformation by turning itself into Macy's Inc, in 2007.
Got it? Of course not. I still don't get it (I might draw a chart next week, if I figure out how to make Google's chart thing work - don't hold me to that). The more closely you look at the department store landscape, the more confusing it's history gets. Fortunately, thanks to all these buyouts and mergers, things are a little clearer today. Basically you have Macy's, Saks, J.C. Penney, Dillard's, Nordstrom's, the Bon-Ton and Sears for department stores, with Kohl's, Target, TJX (TJ Maxx and Marshall's), and the grand daddy of all retail Wal-Mart competing on the discount end of things (check out Google Finance for a snapshot of the industry financials). That's the state of affairs that I want to take a look at in the coming weeks. But I'm not just interested in business data, I am also interested in department store culture. I worked at a Bon Ton in York, PA and the parallels between that Bon-Ton and this Macy's are eerie, yet another reason that I started digging into Macy's financials (which are mostly a matter of public record thanks to being a publicly traded company and all).
Over the next couple of weeks, I am planning on thinking aloud, sharing the things I discover about Macy's, and writing about how Macy's Herald Square works (or, uh, doesn't work, as the case may be), from the perspective of a cashier (ok, sales associate). Next week? I think we will talk about getting hired.
