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Macy's presentation doesn't pass test in university class
Federated Department Stores Inc.'s pending makeover of Marshall Field's rates one thumb up, two thumbs down from business students at Loyola University Chicago.
As part of a summer school final exam, students in the university's undergraduate strategic management course were asked to predict the success or failure five years down the road of Federated's plan to create a national department store out of a motley assortment of regional chains.
About one-third of the class forecast success and two-thirds anticipated varying degrees of failure, said Homer Johnson, professor of management at Loyola's school of business administration and the course's creator. Johnson posed the question to students in the spring semester as well, and got the same results.
"It's a good exercise," said Johnson. "Students can argue easily for both ways. This is no slam dunk."
Among the reasons cited for success were Macy's new store design, the expansion of its exclusive in-house brands, the purchasing power that comes from economies of scale and the retailer's marketing efforts to attract young consumers who, for the most part, have avoided shopping at department stores.
Students skeptical that the strategy will work focused on Federated's debt ($8.6 billion as of July 29), competition from big-box stores and specialty stores, the long-running consumer shift away from department stores in general and doubts about the company's ability to execute.
Perhaps more telling than the exam itself was the response Johnson received when he asked his students, most who are roughly 21 or 22 years old, to raise their hand if they shop at department stores. Of the 122 students in both classes, only one said he recently made a department-store purchase: He went to Sears to buy a DieHard battery for his car, Johnson said.
"Young people just don't go to department stores," said Johnson. "It's a key point in the history of Federated and the department-store industry. And the real question is, is this the beginning of the end or can they revive?"
Federated, with headquarters in New York and Cincinnati, acquired Marshall Field's last year as part of its $11 billion purchase of St. Louis-based May Department Stores Co. On Sept. 9, the retailer plans to convert hundreds of stores to the Macy's banner, including Field's.
IN THE RED: The construction pace is picking up at Marshall Field's State Street in preparation for next month's conversion to Macy's. The spray of paint as workmen change the color of columns and walls to Macy's red is as common as the spray of cologne from eager cosmetic sales associates. Price-check scanners, black computer boxes that allow shoppers to look up merchandise prices without having to find a sales assistant, also are being installed.
OTHER FIELD'S CHANGES: The Yves Saint Laurent accessories boutique, which opened on the first floor in 2002, is shuttered. Field's moved a small selection of YSL handbags and accessories to the store's YSL designer clothing boutique at the 28 Shop. A 1,300-square-foot Coach shop, one of the largest displays of Coach handbags in Macy's chain, is under construction in its place, said Macy's North spokeswoman Jennifer McNamara.
OOH-LA-LA, LE WEST LOOP: The fashion front is moving west. Kelly Bry and Courtney Plumb, fashion alums of Krista K on Southport Avenue, are dressing up the West Loop, the warehouse district known for its urban lofts and trendy restaurants. They opened Ouest this month at 1063 W. Madison St., a women's contemporary clothing boutique with hard-to-find French labels including Barbara Bui, Vanessa Bruno and Stella Forrest. Ouest, which means "west" in French, is a cream-colored, 1,200-square-foot shop with crystal chandeliers, velvet furnishings and fitting rooms fashioned after beach cabanas.