SOUTHERN CALIFORNIA JOB MARKET : CHALLENGES OF THE WORKING LIFE : ON THE JOB : UNREALIZED FEARS : Bullock’s Employees Were Relieved to Discover That R. H. Macy, for the Most Part, Liked What It Purchased
When R. H. Macy & Co. agreed last spring to buy Bullock’s, employees of the Southern California department store chain were jubilant. Here was a prominent, highly regarded New York retailer saving them from the clutches of Campeau Corp., a Canadian development firm that was buying the parent company of Bullock’s after a grueling battle.
But when speculation became rife that Macy’s planned sweeping changes at Bullock’s, including widespread layoffs and a shift of many functions to Atlanta, the employees’ mood turned glum.
Now that 4 1/2 months have passed since Macy’s takeover of Bullock’s, it appears that the more dire predictions have not been borne out.
True, the venerable Bullock’s name, for corporate purposes, has changed to Macy’s South/Bullock’s, although customers still encounter the familiar Bullock’s script at the stores. And yes, there has been a significant shift of employees who select the merchandise for Bullock’s stores, with many of them moving from the downtown Los Angeles headquarters to Macy’s Atlanta offices or to “regional” locations in three Bullock’s stores. Many accepted severance packages and went looking elsewhere. And, indeed, some departed executives left in a huff and remain bitter about the way the transition was handled.
However, according to employees, the majority of the organization remained intact, and workers are going about the business of learning to survive and thrive under new ownership with more than a hint of relief.
“There was amazingly less change than we had all at first imagined,” said one employee, who like others agreed to speak for this story only on the condition that he not be identified. In the beginning, he added, the new owners might have had more drastic changes in mind, “but when they looked around . . . they decided to stick with it. We are, I think, what they would like to be.”
Said another employee: “It really was not the bloodletting that people thought it was going to be. In a merger, everybody thinks the worst because you read about the worst. To call it a pleasant surprise would be an understatement.”
(The employees’ reluctance to talk on the record is proof of at least one cultural change, although it is scarcely one that customers would notice. Macy’s as a rule does not allow the press to interview employees directly, and certainly not for attribution. In fact, several employees contacted said they had been discouraged from talking to the media and therefore would not speak even off the record. Bullock’s management, on the other hand, generally in the past granted interviews with buyers or executives.)
Overall, the easing of tension among Bullock’s employees is classic for a company that has undergone a change in ownership, according to one retail employment expert.
“The one thing that is very encouraging is that, once the deal is made, people make peace very quickly and get on the new team,” said Ann C. Hunt, a partner in the retail practice of Korn/Ferry International, an executive search firm in New York.
Macy’s quickly won over a number of Bullock’s corporate workers by using a one-on-one approach, interviewing every person at headquarters with “a surprisingly open mind,” one employee said. In some cases, Bullock’s executives found themselves supervising Macy’s employees. “They reorganized to take maximum advantage of the people they liked,” he said. “After all, they paid more than $1 billion for us.”
To be sure, there were significant changes at the top. Several top merchandising and promotion executives departed, many of them for high-ranking jobs at other chains in Los Angeles or elsewhere. Some, such as former Bullock’s President Frank Doroff, even ended up working for Campeau after its purchase of Federated Department Stores, Bullock’s parent, was completed. Macy’s quickly installed two of its well-regarded executives, Richard Leto and Jeff Rusinow, as senior vice presidents at Bullock’s, answering to Robert N. Friedman, chairman and chief executive of Macy’s Atlanta.
Even now, some retail industry executives question Macy’s decision to put the primary responsibility for Bullock’s, a quintessentially Southern California chain, in faraway Atlanta. And other changes might be in store. One former Bullock’s official speculated that next to go could be the Northern California base for Macy’s California, Bullocks Wilshire and I. Magnin.
“There are nine innings to a ball game,” said the former officer, who joined another retailer. “This is just the start. Within time, they’re going to pull that whole San Francisco operation and move to Atlanta.”
But one middle-management merchandising employee who transferred to Atlanta is upbeat.
“Initially, there was a lot of emotionalism,” he said. “Once people took the emotionalism out of it and looked at it from a pure business opportunity context, it became very positive. Friends that couldn’t get away from that kept thinking of them (the Macy’s organization) as the other guys. I looked at it as having a new job.”
He said he got “a very substantial raise” and knows of at least two or three colleagues who got big promotions. And he notes that his money goes farther in Atlanta, which he called an “up-and-coming city” with a lower cost of living.
A management consultant sounded a cautionary note, however. “Some of those people are Federated people who will carry that label for a long time,” said Ken Stevens, with the Los Angeles office of McKinsey & Co., about the transfers. “Who knows when they might plateau?”
All told, sources inside Bullock’s say, there was only a slight change in the number of employees, which now totals about 10,000. The number of buyers was reduced to 75 from about 90, and the number of assistant buyers dropped to 75 from 100. According to a Bullock’s source, “Basically anyone in the buying organization who was in good standing and wanted to stay on and who was open to new ideas and resilient to some changes was very much encouraged to stay.”
Fewer than 100 headquarters employees took Macy’s up on its offer of a “separation package,” described by one official as “pretty generous.” In some cases, their departures cleared the way for assistant buyers to gain promotions to buyer posts.
Some divisions actually had increases. More than 100 salespeople were added to the stores, and 75 new distribution center jobs were created, to handle increased stock.
That is one change longtime customers will notice quickly. There is far more merchandise in Bullock’s stores than in the past. Whereas Bullock’s had a reputation as being a “well-edited” store that displayed a limited selection, Macy’s tends to squeeze more merchandise onto racks and shelves.
Fears of customers and employees that Macy’s, a more middle-line retailer, would down-scale Bullock’s have not yet been realized. One merchandising employee said his area has been left untouched. “They have not tampered with the assortments,” he said. “They haven’t said, ‘You have to buy this or you can’t buy that.’ ”
In one executive’s view, much of the initial uncertainty resulted from Macy’s decision not to communicate changes directly to employees until after the sale had gone through. Once the deal was official, Macy’s started issuing a series of “Transition Update” memos to workers. In one, employees were assured that the change of ownership would have no effect on benefits, and they were invited to send in questions.
One question frequently asked by employees has been whether Macy’s intends to change the Bullock’s name. So far, one employee said, “in every meeting where the topic comes up, it’s reinforced that we will maintain the Bullock’s name, for all kinds of very important reasons, including the good will in the community.”
“The whole intent,” he added, “is to meld the good things that both organizations have to offer.”