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What's in store for Field's?
For the second time in less than a year, Marshall Field's and Frango mints have been caught up in a wave of consolidation sweeping the nation's struggling department stores.
This time, the Chicago icon, known for its distinctive green bags and its elaborate Christmas windows, will become a piece of Federated Department Stores Inc., if the Cincinnati-based retailer's $11 billion deal to acquire May Department Stores Co. is approved.
May beat out Federated in a $3 billion bidding war for Field's valuable franchise last July. But this time, the ownership change raises the prospect the respected Marshall Field's name may not endure.
Federated is intent on building a national chain of department stores under two banners--Macy's and Bloomingdale's-- in order to cut costs and more efficiently buy advertising. Even Chicago's long-standing attachment to Field's may not be enough to save the name, retail experts said.
"Federated won't do something dumb like change the name next month. But long term, we will see Marshall Field's become Macy's," predicts Neil Stern, a retail consultant with Chicago's McMillan/Doolittle. "Long term could mean three or four years out."
On Monday, Federated Chief Executive Terry Lundgren said no decision has been made on the fate of Field's nameplate.
But Chicago without Field's is something many shoppers like Nancy Safron don't want to think about.
Safron, who grew up with Field's, still loves shopping there. She can quickly survey new fashion offerings, pick up a gift of Frango mints and grab lunch in the food court.
"I never walk out of the store without finding something I need," said Safron, a teacher who lives in south suburban Flossmoor. "If there were no Marshall Field's, what would people do?"
Lincoln Park resident Anne Roche agrees that Field's represents "quintessential Chicago" as she was shopping for athletic gear Monday at its State Street flagship. She heads to Field's when she is looking for a "one-stop shopping place."
Such loyal shoppers are a shrinking group, however, and department stores have been combining at a rapid pace, hoping to gain cost advantages that will help them stay in the game.
The merger of Federated and St. Louis-based May can be viewed as either a last stand or a new offensive.
For Cynthia Cohen, president of retail consulting firm Strategic Mindshare, the right answer is the second one.
"I'm optimistic" about the future of department stores, she said Monday. "When you throw these two together, you save a lot of money, which should enable you to invest in the future. The future is a new invigorated department store."
These new department stores need to edit their fashion more tightly, creating a cohesive assortment of contemporary apparel and housewares. They will need enough salespeople on the floor to offer advice that department stores were once known for.
"Even old ladies don't want to look like old ladies anymore," Cohen said. "Boomer women want age-appropriate sexy apparel. They're desperate to be desperate housewives. The days of the house dress are gone."
Some department stores have gotten the message.
Lord & Taylor, one of May's chains, is a year into a major makeover intended to upgrade its fashion quotient and the appearance of its stores. Macy's has invested resources and advertising dollars into private-label apparel lines such as I.N.C., which consumers recognize as a real brand in surveys.
Marshall Field's has turned the first floor of its State Street store into an emporium of boutiques ranging from Levenger, the leather goods retailer, to Thomas Pink, a luxury shirt-maker from London. Its fashion offerings have gotten a little edgier, reflecting the urban tastes of its core Chicago customers.
Department stores are "still in the game," concurs Stern.
But there's no question that department stores have lost ground over the past 15 years, and much of the damage has been self-inflicted.
"Five years ago, 23 percent of men in American shopped at a major department store during the holidays. Last Christmas, less than 8 percent of men shopped there," said Britt Beemer, author of "Predatory Marketing" and a consultant with America's Research Group.
"In the old days, men would go to a department store and find somebody that looked like their wife. Then they'd say, `Let's go shopping.' Now they can't find anybody. Everybody is behind a cash register."
Department stores also lost market share with teen shoppers as a bevy of new chains such as Abercrombie & Fitch and Hot Topic began courting the younger set.
As times got tougher, many department stores cut back on staffing and took fewer risks on merchandise. Soon one store looked much like another, making sameness a common complaint among shoppers.
"A Liz Claiborne is a Liz Claiborne is a Liz Claiborne," noted Dianne Erpenbach, fashion/retail management coordinator at Columbia College Chicago.
Beemer blames the blandness on the rise of bean-counting retail executives who took power away from the old-line merchants who cared more about giving the customer what she wanted than beating a Wall Street estimate.
But shoppers need department stores for the reason they always have, retail experts say.
Retailers gather a wide variety of brands for men, women, teens and children under one roof, offering convenience for time-pressed shoppers. Where else can a woman find a wedding dress, a china pattern and a leather couch in a single store? Or pick up moisturizer from Clinique, lipstick from Chanel and shampoo from Kiehl's in a lunchtime shopping trip?
Some of them such as Nordstrom and Neiman Marcus are still providing the hand holding that many customers want. Nordstrom's concierge will call a cab for a customer or buy theater tickets. Neiman's salespeople work the phones, inviting customers in for makeovers and offering them first shot at sales.
Getting to know new owners is nothing new for Field's.
In the early 1980s, Field's was a publicly traded company when it was acquired by British tobacco conglomerate Batus Industries Inc. As the free-spending, power-dressing 1980s drew to a close, Field's was sold again, this time to Dayton Hudson Corp., which later took the name of its fast-growing discount chain, Target.
After changing the names of its Dayton's and Hudson's stores to Field's in 2001, Target Corp. put Field's on the block in 2004, saying it wanted to concentrate on building its core discount franchise. After an intense bidding war, May emerged as the winner. The deal closed last July.
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Field's gets another owner
Federated Department Stores' buyout of May Department Stores, which owns Marshall Field's, is the latest in a long line of ownership changes for the Chicago institution.
1852: Retailer Potter Palmer opens P. Palmer, Dry Goods and
Carpet on Lake Street.
1865: After establishing themselves as successful Chicago
wholesalers, Marshall Field and partner Levi Leiter
purchase an interest in Palmer's store and three
years later move to State Street.
1871: The original building (above) burns down in the Chicago Fire. Field and Leiter work through the night to save some of their inventory and open a new store two years later.
1877: Fire destroys the new store. Field and
Leiter rebuild once again.
1881: Leiter retires and the store is named Marshall Field & Co.
1906: Marshall Field dies.
1930: A small portion of Field's stock is traded publicly.
1977: Field's rejects a merger with Minneapolis retailer Dayton Hudson Corp.
1982: Batus Industries Inc. buys out Marshall Field & Co.
1990: Batus sells the Field's chain of 24 stores to Dayton
Hudson for $1.04 billion.
2000: Dayton Hudson announces that it will change its corporate
name to Target Corp.
2001: Target Corp. announces it will rename its Dayton's and
Hudson's department stores Marshall Field's, citing the chain's
worldwide name recognition.
July 30, 2004: Target sells off Marshall Field's for $3.2 billion to the May Department Stores Co.
Monday: Federated Department Stores announces a deal to
buy May Department Stores, which includes Marshall Field's as one of its divisions.
Sources: Marshall Field's, Tribune reports
Tribune reporter Brendan McCarthy contributed to this story