Macy’s Ready to Take on Rival in Southland : Chairman Plans Tour of New Retail Chains He Says Will Outdo Nordstrom

His company has yet to ring up its first sale in Southern California. But the chief executive of R. H. Macy & Co. already is taking dead aim at the soon-to-be-rival Nordstrom chain.

“If Nordstrom’s is the real competition--and I suspect we’ll soon discover that it is--we’ll just have to make our stores a more attractive place to shop, “ said Macy’s Chairman Edward S. Finkelstein in an interview Sunday.

Next week, Finkelstein said he plans to jet to Southern California for a tour of the Bullock’s, Bullocks Wilshire and I. Magnin retail chains that his company agreed to buy last week. And when he arrives, Finkelstein said, his main mission will be to determine how Macy’s can do battle with Nordstrom. The Seattle-based chain is highly regarded for both its customer service and high-quality merchandise.

“This is not a casual investment,” said the 63-year-old Finkelstein, whose company agreed to pay $1.1 billion for the three retail chains. “In order to make decisions about the future of our business out there, I have to get a better feel for each of the properties--and learn more about the people running them.”

Meanwhile, Finkelstein plans to put off any decision on whether to fly the Macy’s banner over the Bullock’s stores. “The last thing on our agenda is the name,” he said. “The name doesn’t mean a damn thing. It’s what the name represents in things like merchandise and customer service that matters.”

Expects to Add Staff

After years of trying to break into the lucrative Southern California market, Macy’s is finally accomplishing its goal, although not quite the way it had hoped. After a two-month takeover battle with Campeau Corp. of Canada for retailing giant Federated Department Stores, Campeau came out the winner.

But to finance its $6.6-billion purchase of Federated, Campeau cut a deal late Thursday evening at Finkelstein’ Manhattan apartment enabling Macy’s to buy the Bullock’s, Bullocks Wilshire and I. Magnin divisions. Meanwhile, Campeau, whose acquisition of Federated is the biggest non-oil takeover in U.S. history, is keeping such posh retail chains as Bloomingdale’s in New York, Burdine’s in Miami and Rich’s in Atlanta.

Finkelstein, however, said he has few regrets about losing the toughly fought takeover battle to Campeau. “We accomplished about 80% of what we wanted to accomplish,” said the executive, who is about to begin his 40th year as a Macy’s employee. “Actually, I had serious anxieties and worries that, if we had won, I would have had to make some extremely difficult decisions, including layoffs.”

Instead of layoffs, he said, he expects eventually to add staff at many of the area’s Bullock’s stores. “The people who provide the service in the stores will have nothing to worry about,” said Finkelstein, whose 91 Macy’s stores employ about nearly 55,000 workers. “They should take heart that when we enter a market we try to build the business up.”

The question remains, however, will that business be built under the Macy’s or Bullock’s name? In one clear signal that the Bullock’s name has some staying power, a new department store that his company is still negotiating to build in Marina del Rey will likely open under the Bullock’s name, Finkelstein said.

Marketing specialists say, more than any single factor, a store’s name can sometimes speak louder than its merchandise. That is why, for several reasons, many experts believe the Macy’s name is destined to fly here.

“You have to look at what they have done in the past” said Steve Ginsberg, West Coast bureau chief of Women’s Wear Daily, the trade publication. “From that standpoint, most people assume that two or three years down the road, you will see the Macy’s name on Bullock’s stores.”

Intensified Efforts

Indeed, Macy’s eventually converted the names of major department store chains it took over in both Georgia and New Jersey, to its own. After the names changed, Finkelstein said, “we didn’t get three letters of complaint.”

What’s more, it would be much easier to advertise and promote the chain under a single name, said Ira Bachrach, president of NameLab Inc., a San Francisco consulting firm. “If you call it all Macy’s, you could advertise statewide with a single name. And that would put them in a much better position to go after Nordstrom, who is really the enemy.”

Another possibility, he said, would be for the upscale Bullocks Wilshire chain to change its name to I. Magnin while Bullock’s is renamed Macy’s, he said.

Finkelstein intensified his efforts to move into the Southland last year, when he made four trips here. On these occasions, he mostly scouted potential Macy’s locations from helicopters.

“For a while there, back in the early 1980s, we didn’t even think that we could get into Southern California,” he said. Rival department store chains had such a strong lock on the market, they were effectively shutting out Macy’s, he said. “Before you move into a mall, you have to get clearance from all the other department stores, and that’s not easy when you’re a Macy’s.”

Still, Finkelstein said, don’t look for Macy’s to dominate the local retail landscape any time soon. “Southern California will never be our biggest market,” said Finkelstein. “We dominate in states like New York, New Jersey and Pennsylvania. But I don’t see that happening in Southern California.”

Rival retailers may take heart from that, but some could stand to benefit from Macy’s nearby presence.

In 1984, just one year after Macy’s opened into the Aventura Mall in North Miami, Fla., the mall’s overall business jumped nearly 25%, said Don Soffer, owner of the mall. He estimated that the Macy’s store in his mall has annual sales of $75 million--more than twice that of the mall’s second-largest tenant, J. C. Penney, which has sales of about $35 million each year, he said.

One-Day Sales

“You should see what happens when Macy’s has their one-day sales,” said Soffer. “The mall parking lot gets so crowded that some people try to park their cars right on the (adjacent) golf course. Imagine that. We have to tow them away, of course.”