Macy's, Inc.

Macy's, Inc. (originally Federated Department Stores, Inc.) is an American holding company founded by Xavier Warren in 1929. Upon its establishment, Federated held ownership of the regional department store chains Abraham & Straus, Lazarus, Filene's, and Shillito's. Bloomingdale's joined Federated Department Stores the following year. Throughout its early history, frequent acquisitions and divestitures saw the company operate a number of nameplates. In 1994, Federated took over the department store chain Macy's. With the acquisition of The May Department Stores Company in 2005, the regional nameplates were retired and replaced by the Macy's and Bloomingdale's brands nationwide by 2006. Ultimately, Federated itself was renamed Macy's, Inc. in 2007.

This article is about the holding company originally named Federated Department Stores. For its department store chain, see Macy's.

Macy's, Inc.

Macy's, Inc. headquarters
Formerly	Federated Department Stores, Inc. (1929–2007)
Type	Public
Traded as	NYSE: M S&P 600 component
Industry	Retail
Founded	1929 in Columbus, Ohio
Headquarters	New York, NY , U.S.
Number of locations	777 (841 boxes) (Q1 2020)[1][2]
Area served	Nationwide
Key people	Jeff Gennette (Chairman and CEO)
Products	Clothing footwear accessories bedding furniture jewelry beauty products housewares
Revenue	US$24.971 billion (FY2019)[1]
Operating income	US$1.738 billion (FY 2019)[1]
Net income	US$1.098 billion (FY 2019)[1]
Total assets	US$19.194 billion (FY2019)[1]
Total equity	US$6.436 billion (FY 2019)[1]
Number of employees	~130,000 (Feb. 2019)[1]
Subsidiaries	Macy's Bloomingdale's Bluemercury
Website	macysinc.com

Macy's, Inc. is headquartered in New York, New York. It operates the subsidiaries Macy's, Bloomingdale's, and the beauty store chain Bluemercury, all of which have a flagship store located in the New York City borough of Manhattan. As of May 2, 2020, the company operated 777 locations (841 boxes, including 586 full-line boxes) in the United States, Guam, and Puerto Rico.[2] Its namesake locations and related operations account for 90% of its revenue. According to Deloitte, Macy's, Inc. is the world's largest fashion goods retailer and the 36th largest retailer overall, based on the company's reported 2010 retail sales revenue of $25 billion (equivalent to $29.3 billion in 2019).[3]

History

1929–1988: Operations as Federated

Federated Department Stores traces its corporate lineage to F&R Lazarus & Company, founded in Columbus, Ohio, in 1851. On November 25, 1929, Federated was founded by Xavier Warren in Columbus as a department store holding company for Lazarus (including its Cincinnati division, then known as Shillito's), Abraham & Straus, and William Filene's Sons of Boston. In 1930, Bloomingdale Brothers of New York joined.[4]

In the mid-1930s, a modern merchandising standard was set when Fred Lazarus Jr. arranged garments in groups of a single size with a range of style, color and price, basing the technique upon observations made in Paris. As well, Lazarus convinced President Franklin D. Roosevelt that it would help American economy to change the Thanksgiving holiday from the last Thursday of November to the fourth Thursday, thus extending the Christmas shopping season. An act of Congress perpetuated the arrangement in 1941. Black Friday became a nationwide sensation and the most profitable day for Federated. (Lazarus Jr. worked at Federated until he died in 2013, the last remaining family member with an official role at the company.[5])

In 1945, Federated moved its corporate offices to Cincinnati.[6] The latter half of the 20th century saw the company expand nationwide, adding Rike Kumler of Dayton, Ohio (merged into Shillito's in the 1980s to become Shillito-Rike's); Burdines of Miami, Florida; Rich's of Atlanta, Georgia; Foley's of Houston, Texas; Sanger Brothers and A. Harris, both of Dallas, Texas (which were merged to form Sanger-Harris); Boston Store of Milwaukee, Wisconsin; MainStreet of Chicago, Illinois; Bullock's, of Los Angeles; I. Magnin, of San Francisco, California; Gold Circle; and Richway Discount Department Stores of Worthington, Ohio. Federated entered the supermarket industry in 1968 when it acquired the Ralphs chain based in Southern California.[7] In 1982, Federated acquired the Twin Fair, Inc. discount store chain based in Buffalo, New York, and merged it with Gold Circle.[8] In 1983, Federated sold four shopping center properties to JMB Realty.[9]

Federated under Campeau (1988-1992)

Canadian real estate developer Robert Campeau - who had taken over and dismembered Allied Stores in 1986 - attempted to take over Federated starting in early 1988 which Federated fought off in a high-profile battle, with Macy's (at that time not part of Federated, but a rival), also submitting competitive bids of over $6 million.[10] Nonetheless, in April 1988, Federated gave in and agreed to a $6.6 billion takeover by Campeau. It was the largest merger in corporate history, barring the oil sector. Macy's paid Campeau $1.1 billion to acquire the 20-store Bullock's/Bullocks Wilshire and the 25-store specialty apparel chain I. Magnin.[11] Two years later, Federated filed for bankruptcy after Campeau failed to refinance the debt of Federated and Allied Stores Corp.[12] In 1992, Campeau was ousted and Federated emerged from bankruptcy as a new public company. As part of the reorganization, Federated sold the Ralphs chain to a group of owners led by Edward J. DeBartolo Corporation.[13]

Acquiring and Nameplating as Macy's (1994-2005)

Also in 1992, Macy's declared bankruptcy; Federated acquired it two years later, in 1994. The name of the once-main-rival of Federated, Macy's, would soon become the consumer-facing identity of most of Federated's stores.

In 1995 Federated bought Broadway Stores, Inc. and its California-based Emporium-Capwell, Weinstock's and The Broadway chains.[14] Macy's changed the nameplate of these three chains and Bullock's to Macy's, or in some cases, turned locations into Bloomingdales. In 2003, Federated changed the nameplates of almost all their remaining non-Macy's stores — the lone exception was Bloomingdales — to include the Macy's name, a rebranding internally dubbed Project Hyphen. For example, Seattle-based The Bon Marché became Bon-Macy's; Goldsmith's in Tennessee became Goldsmith's-Macy's; Lazarus, Burdines, and Rich's also added "-Macy's" to their name. A year later, the hyphenated names were changed to simply Macy's, a rebranding process referred internally to as Project Star.

The department store chain Stern's, a division of Federated, ceased operations in 2001 and most of its stores became Macy's stores.

Federated began selling goods online in 1998, rather later than most contemporary large retailers; Federated ran a private bank, FDS Bank, which issued and maintained the majority of its own consumer credit card portfolio,[15] was one of the last credit card banks to begin to allow its cardholders to access account information online (around 2004).

In 1998, Federated settled an SEC investigation for $14.46 million (equivalent to $22.7 million in 2020) due to unethical debt-collection practices. Federated routinely forced credit card holders/debtors to sign an agreement that legally bound them to repay their outstanding balances instead of having the unsecured debt discharge via the filing of bankruptcy. Federated failed to file reaffirmation agreements with bankruptcy courts. As a result, the changes in the agreements were not legally binding.[16][17][18][19]

In 2001 Federated acquired Liberty House of Hawaii as it emerged from Chapter 11 bankruptcy. It was managed as part of Macy's West and all the store names were changed to Macy's.[20]

In 2005, Federated agreed to sell its credit card business to Citigroup.[21]

In February, 2020, Macy's announced that their headquarters in downtown Cincinnati will be closing in the near future with all corporate operations relocating to New York City. This news came after a gradual pulling out of the Cincinnati area with a couple of area store closures and the retirement of a top executive.

2005–2006: Acquisition of May

The former Federated Department Stores logo, in use until 2007

On July 18, 2005, Federated Department Stores announced that it would acquire May Department Stores company for $11 billion (equivalent to $14.4 billion in 2020) in cash and stock. Also part of the buyout was the bridal and formal unit of May, consisting of David's Bridal and After Hours Formalwear. Federated would also assume $6 billion (equivalent to $7.85 billion in 2020) of May's debt, bringing total consideration to $17 billion (equivalent to $22.3 billion in 2020). The deal would create the nation's largest department store chain with over 1,000 stores and $30 billion (equivalent to $39.3 billion in 2020) in annual sales. To help finance the deal, Federated agreed to sell its combined proprietary credit card business (but still administered by FACS Group, a subsidiary of Federated) to Citigroup. The merger was completed on August 30, 2005, after an assurance agreement was reached with the Attorneys General of New York, California, Massachusetts, Maryland and Pennsylvania.

As a result of the merger, Federated also in the process reacquired two of their former department store chains Foley's & Filene's (Which Federated originally sold to May Company), putting them back under the Federated Department Stores corporate umbrella for the first time since 1988.

Federated announced plans to sell 80 store locations in 2006, having pledged in its settlement to sell most of them as viable businesses, with preference being given to a group of thirteen competitors. This number could fluctuate pursuant to Federated's negotiations with various mall landlords and its final decision regarding using former Macy locations for its luxury Bloomingdale's operation.

On January 12, 2006, Federated announced its plans to divest May Company's Lord & Taylor division (48 stores in 12 states) by the end of 2006 after utilizing prime and conflicting real estate by closing and converting several locations. On June 22, 2006, Macy's announced that NRDC Equity Partners, LLC would purchase Lord & Taylor for US$1.2 billion (equivalent to $1.52 billion in 2020), and completed the sale in October 2006.

On September 9, 2006, the former May Company store names Famous-Barr, Filene's, Foley's, Hecht's, The Jones Store, Kaufmann's, L. S. Ayres, Marshall Field's, Meier & Frank, Robinsons-May, and Strawbridge's disappeared as Federated switched most of them to the Macy's masthead and a few to the Bloomingdale's name. The conversion of Marshall Field's in Chicago was particularly criticized, with many customers boycotting its historic State Street flagship store. The Chicago Tribune continues to report on the poor reception of Macy's in Chicago. Pittsburgh customers also strongly resisted the name change from Kaufmann's, in part because of the Kaufmann family role in Pittsburgh history, as well as the central store's Christmas windows and holiday parade.

One of the consequences of this rebranding is that several malls have two Macy's stores. In downtown Boston, Federated liquidated an acquired Filene's because it already had a Macy's (formerly a Jordan Marsh) across the street. The two stores have a combined floorspace of more than 1,400,000 square feet (130,000 m²), more than two-thirds the size of Macy's New York City flagship store.

On November 17, 2006, the bridal and formal unit was sold. David's Bridal and Priscilla of Boston were sold to Leonard Green & Partners. After Hours Formalwear was sold to Men's Wearhouse.[22]

2007–present: Operations as Macy's, Inc.

Former Macy's, Inc logo, until 2019

On February 27, 2007, Federated announced that its board of directors would ask shareholders to change the company's name to Macy's Group, Inc. By March 28, the company revised its plans for the new name, opting to eventually become Macy's, Inc. Federated shareholders approved the revised proposal during the company's annual meeting on May 18, 2007.[23] The company was previously known as Federated Retail Holdings, Inc.

The name took effect on June 1, 2007. Reasoning for the proposed name change—according to Terry Lundgren, Federated's chairman, president and chief executive officer—hinges on the large-scale conversions throughout the company toward the Macy's nameplate. "Today, we are a brand-driven company focused on Macy's and Bloomingdale's, not a federation of department stores," Lundgren said in the company's press release heralding the proposed name.[24] Upon the change to Macy's Inc., Federated's stock ticker symbol on the New York Stock Exchange changed from "FD" to "M", making the new Macy's Inc. one of a handful of single-letter ticker symbol companies.[25]

In April, 2008, Moody's Investors Service said that it may downgrade Macy's Inc. bonds to just above junk status.[26] That same month, Fitch Ratings downgraded their ratings to BBB- from BBB, noting a deterioration in the company's operating and credit metrics. A rating of BBB- is one notch above junk status.

The domain macysinc.com attracted at least 3 million visitors annually by 2008 according to a Compete.com survey.[27]

On Wednesday, February 6, 2008, Terry Lundgren announced the localization strategy and the company's plan to shed 2,550 jobs. This new localization strategy is known as "My Macy's."

Employees of the Macy's North headquarters office in Minneapolis, the Macy's Northwest headquarters office in Seattle, and the Macy's Midwest headquarters office in St. Louis were given pink slips, as Macy's pared its seven regional centers to four. About 40 new jobs were to be created in May as part of the restructuring. By 2009, the company expected to save $100 million (equivalent to $119 million in 2020) a year from the cuts.

On February 2, 2009, Macy's announced the elimination of 7,000 jobs, or 4% of its work force, and slashed its dividend as it looked to lower expenses as part of major restructuring. Cincinnati-based Macy's Inc. said the work force reduction includes positions in offices, stores and other locations. The cuts will include some unfilled jobs. "Reducing our workforce is an unfortunate outcome of the current economic environment, and I am frustrated that so many of our people will be unable to move forward with us as we proceed into a very exciting future for Macy's and Bloomingdale's" said Terry J. Lundgren, chairman, president and chief executive officer. "

Macy's also got rid of its division structure and integrated its functions into one organization. Macy's central buying, merchandise planning, stores senior management and marketing functions merged to its New York City corporate office (formerly Macy's East). Corporate-related business functions, such as finance and human resources, will be primarily in Cincinnati. To buy with local consumers in mind, Macy's developed a concept called "My Macy's", in which the buyers and planners all look at what the local consumer base is looking for in their local Macy's store. This will help bring a better sense of branding, sizing, and marketing to each Macy's store nationwide.

Macy's Inc. decided to close the Bloomingdale's at the Mall of America in Minnesota. Since 1994, Bloomingdale's had been one of the 4 anchor stores of the mall, and will be replaced with a $30 million renovation with four new foreign clothing stores.

On October 14, 2013, Macy's Inc. announced the decision to open most of their stores for the first time on Thanksgiving Day 2013, breaking a long-standing tradition of 155 years, and joined the ranks of retailers who created Gray Thursday the year before. Its doors opened at 8 p.m. (local time) on the holiday evening, and remained open for 24 hours straight until the close of business on Friday, which is usually about 10 p.m.[28]

As of February 2014, Macy's Inc. is valued at US$28 billion.[29]

In September 2015 Macy's announced it would close 40 stores, 5% of its total stores in early 2016. It also announced plans to open 6 additional Macy's Backstage locations. From 2010 to 2015, Macy's had closed 52 stores and opened 12.[30]

Finances

Year	Revenue in mil. USD$	Net income in mil. USD$	Total Assets in mil. USD$	Employees	Stores
2005	15,776	689	14,885	112,000	459
2006	22,390	1,406	33,168	232,000	868
2007	26,970	995	29,550	188,000	850
2008	26,313	893	27,789	182,000	853
2009	24,892	−4,775	22,145	167,000	847
2010	23,489	329	21,300	161,000	850
2011	25,003	847	20,631	166,000	850
2012	26,405	1,256	22,095	171,000	842
2013	27,686	1,335	20,991	175,700	841
2014	27,931	1,486	21,620	172,500	840
2015	28,105	1,526	21,330	166,900	823
2016	27,079	1,072	20,576	157,900	870
2017	25,778	619	19,851	148,300	829
2018	24,837	1,547	19,381	130,000	852

[31]

Nameplates

Current

Name	Year founded	Year acquired	# of locations	# of boxes[32]
Bloomingdale's	1860	1930	54, including 34 department stores, 1 furniture/other store and 19 outlet stores	56, including 36 department stores, all full line, 1 furniture/other store and 19 outlet stores
Bluemercury	1999	2015	171
Macy's	1858	1994	552, including 11 flagships and 384 magnets, for a total of 395 core stores, and 97 neighborhood stores, 50 furniture galleries, 3 furniture clearance centers 6 freestanding Backstage stores and 1 Market by Macy's	614, including 16 flagships and 430 magnets, for a total of 446 core stores, 103 neighborhood stores, for a total of 550 full line stores, and 55 furniture galleries, 3 furniture clearance centers, 6 freestanding Backstage stores and 1 Market by Macy's

Former

Name	Founded	Defunct	Operated by Federated	Previous names	Notes
A. Harris and Company	1887	1961	1961		Merged with Sanger Brothers to form Sanger-Harris
Abraham & Straus	1865	1995	1929–1995		Folded into Macy's
The Bon Marché	1890	2005	1992–2005	The Bon Macy's (2003–2005)	Folded into Bloomingdale's and Macy's
Boston Store	1897	2018	1948-1985		Sold to Maus Frères, owner of Bergner's in 1985, which was renamed Carson Pirie Scott 1993, then to Proffitt's in 1998, which was renamed Saks, Inc., and to The Bon-Ton in 2006. Returned as an online retailer owned by CSG Generation in September 2018, after The Bon-Ton went out of business in August of that year.
Bullock's	1901	1996	1964-1988, 1995–1996		Folded into Macy's
Burdines	1896	2005	1956–2005	Burdines–Macy's (2003–2005)	Folded into Macy's
The Emporium	1896	1996	1995-1996		Folded into Macy's
Famous-Barr	1911	2006	2005–2006		Folded into Macy's
Filene's	1881	2006	1929–1988, 2005–2006		Folded into Macy's
Foley's	1900	2006	1947–1988, 2005–2006		Folded into Macy's
Gold Circle	1967	1988	1967-1988		Liquidated in 1988
Gold Triangle	1970	1981	1970–1981		Closed or converted into Richway stores
Goldsmith's	1870	2005	1959–2005	Goldsmith's–Macy's (2003–2005)	Part of Rich's division Folded into Macy's
Hecht's	1857	2006	2005–2006		Folded into Bloomingdale's and Macy's
I. Magnin	1876	1994	1964-1987, 1994		Folded into Macy's
The Jones Store	1887	2006	2005–2006		Part of Famous-Barr division Folded into Macy's
Jordan Marsh	1841	1996	1988–1996		Folded into Macy's Had a separate division in Florida called Jordan Marsh Florida, which was folded into Burdines in 1991.
Kaufmann's	1871	2006	2005–2006		Part of Filene's division Folded into Macy's
L. S. Ayres	1872	2006	2005–2006		Part of Famous-Barr division Folded into Macy's
Lazarus	1851	2005	1929–2005	Lazarus–Macy's (2003–2005)	Part of Rich's division Folded into Macy's
Liberty House	1849	2001	2001		Folded into Macy's
Lord & Taylor	1826	N/A	2005–2006		Sold to NRDC Equity Partners
Maas Brothers	1886	1991	1988-1991		Folded into Burdines
MainStreet	1983	1988	1983-1988		Sold to Kohl's
Marshall Field's	1852	2006	2005–2006		Folded into Bloomingdale's and Macy's
Meier & Frank	1852	2006	2005–2006		Part of Robinsons-May division Folded into Macy's
Rich's	1867	2005	1976–2005	Rich's–Macy's (2003–2005)	Folded into Bloomingdale's and Macy's
Richway	1968	1988	1976-1988		Folded into Gold Circle (Charlotte, North Carolina stores rebranded to Gold Circle, all others remained Richway))
Rike's	1853	1982	1959-1982		Merged with Shillito's to form Shillito-Rike's
Robinsons–May	1993	2006	2005–2006		Folded into Bloomingdale's and Macy's
Sanger Brothers	1868	1961	1951-1961		Merged with A. Harris and Company to form Sanger Harris
Sanger-Harris	1961	1987	1961-1987		Folded into Foley's
Shillito's	1830	1982	1929-1982		Merged with Rike's to form Shillito-Rike's
Shillito-Rike's	1982	1986	1982-1986		Folded into Lazarus
Strawbridge's	1868	2006	2005–2006		Part of Hecht's division Folded into Macy's
Stern's	1867	2001	1988–2001		Folded into Bloomingdale's and Macy's

References

1. "Macy's, Inc. 2018 Annual Report (Form 10-K)". sec.gov. U.S. Securities and Exchange Commission. February 2019.
2. "Store Count and Square Footage". Macy's, Inc. Retrieved 2020-07-03.
3. Deloitte, Switching Channels: Global Powers of Retailing 2012, January 2012, at pp. G11 and G27.
4. "Fred Lazarus 3d, 84, Retailing Executive". Retrieved 2018-06-25.
5. Dispatch, Tim Feran, The Columbus. "Store executive Robert Lazarus Jr. was community pillar". The Columbus Dispatch. Retrieved 2018-06-25.
6. "Business - The Enquirer - October 12, 1997". enquirer.com. Retrieved 2018-06-25.
7. "History of Federated Department Stores, Inc. – FundingUniverse". www.fundinguniverse.com. Retrieved 20 October 2019.
8. "Federated to Buy Twin Fair Stores", The New York Times, March 27, 1982 (accessed August 26, 2008).
9. "Federated Stores". Retrieved 2018-06-25.
10. Mayer, Caroline E. (March 16, 1988). "Macy's counters Campeau with new Federated bid". Washington Post.
11. Mayer, Caroline E. (1988-04-02). "Federated Stores Accepts Campeau Takeover Offer". Washington Post. ISSN 0190-8286. Retrieved 2018-06-25.
12. "Federated, Allied file for Chapter 11 bankruptcy". UPI. Retrieved 2018-06-25.
13. Lazzareschi, Carla (4 February 1992). "Ex-Creditors Acquire Ralphs Supermarkets". Los Angeles Times. Retrieved 20 October 2019.
14. "Federated to Buy Broadway Stores For $1.6 Billion". New York Times. August 15, 1995.
15. "The Cincinnati Enquirer from Cincinnati, Ohio on November 10, 2001 · Page 27". Newspapers.com. Retrieved 2018-06-25.
16. "Federated Settles for Millions," BCD News and Comment. Vol. 32:1. March 3, 1998.
17. "Federated Department Store Settles FTC Action for 8 Million," Consumer Financial Services Law Report. Vol. 3:1. June 11, 1999.
18. "FTC and Federated Settle Reaffirmation Claims," Consumer Bankruptcy News, Vol. 8:19. June 17, 1999.
19. "Exhibit10.1 11012014". www.sec.gov. Retrieved 2018-06-25.
20. Liberty House (department store)
21. Fasig, Lisa (2 June 2005). "Federated to sell credit card business for $4.5 billion".
22. Federated Agrees to Sell Bridal Group, Federated Department Stores, Inc., November 17, 2006.
23. http://biz.yahoo.com/ap/070518/federated_macy_s.html?.v=1
24. Federated Plans Corporate Name Change, Federated Department Stores, February 27, 2007.
25. "Federated Plans 'M' Stock Ticker". Yahoo Business. AP. March 28, 2007.
26. Witkowski, Wallace. "Moody's may downgrade Macy's on weak credit". MarketWatch. Retrieved 2015-05-24.
27. "macysinc.com UVs for April 2015". siteanalytics.compete.com. Archived from the original on 2011-05-22. Retrieved 2015-05-24.
28. Malcolm, Hadley (October 14, 2013). "Most Macy's stores will open at 8 p.m. on Thanksgiving". USA Today. Retrieved October 15, 2013.
29. Moin, David (February 26, 2014). "Macy's Sets Strategy to Keep Momentum". WWD. Retrieved February 26, 2014.
30. Isidore, Chris (2015-09-09). "Macy's closing up to 40 more stores". CNNMoney.
31. "Macy's Financial Statements 2005-2020 | M". www.macrotrends.net.
32. "Macy's Inc. Store Count 2020".

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