Herewith a portion of this morning's article:
Federated Department Stores posted a surprise third-quarter loss Wednesday due to $145 million in costs to convert Marshall Field's and 10 other regional department stores to Macy's, and gave new details about sales declines at the former Field's stores.I suggested in the italicized rant portion of the earlier post that this "direction" was right down the tubes. But, recently, I heard an alternate explanation of this crazy move that -- while Machiavellian -- just might (eventually) justify the jettisoning of the venerable Field's name: It's all a real estate deal.
Federated jettisoned Marshall Field's name and reconfigured the chain as Macy's on Sept. 9, one year after it bought Field's former owner, St. Louis-based May Department Stores.
The $3 million net loss, or 1 cent a share, compared with a year-ago profit of $436 million, or 91 cents, according to Federated's earnings announcement Wednesday.
Total sales, including Bloomingdale's and long-time Macy's stores, increased 6 percent to $5.89 billion -- just short of analysts' forecast of $6 billion.
Sales have declined at Field's and the other former May Department Stores because of fewer sales events and inadequate inventory of goods, among other reasons, Federated Chief Financial Officer Karen Hoguet told Wall Street analysts.
Hoguet cited poor sales of furniture, silverware, bedding, coffee-makers and other home furnishings; lengthy waits for merchandise that wasn't in inventory; fewer sales promotions at Macy's than at the May stores, and salespeople needing time to learn about Macy's new merchandise assortments.
"We have a lot of work in front of us to create a quality selling culture and to execute correctly the localized assortments in the new Macy's stores," Hoguet said.
Hoguet said Macy's stores will offer big home-store sales for the holidays, and she said she is confident the stores are headed in the right direction.
After a few years of declining sales, the sale of the State Street property -- for condo conversion or whatever -- might fetch more than the store itself would be expected to produce, even with years of strong sales. The Macy's stores might even catch on in the suburbs, which are used to generic, national brands, so it could be a win-win for Federated.
If that's the way it plays out... well, cold hard cash will trump tradition and sentiment every time... except in the movie.
I still like the movie.