Federated Department Stores

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I. Introduction

Present day Federated consists of both Bloomingdale’s and Macy’s stores and operates in 34 states as well as Guam and Puerto Rico. While Bloomingdale’s and Macy’s provide both private and national brands and are similar in merchandising categories (men’s, women’s and children’s apparel, home décor, shoes, beauty, and accessories), they differ greatly in culture. Bloomingdale’s, being more upscale, targets consumers that are more concerned with trend and quality than they are price. Macy’s targets the more value oriented consumer and represents a broader Federated clientele. Macy’s represents 423 of the 459 Federated locations while Bloomingdale’s represents only 36 locations. Because I can better relate to the value conscious consumer of the Macy’s division and because they represent such a large portion of Federated, I will further explore their current characteristics and behaviors that suggest that they possess qualities of both monopolistic competition and oligopolies.
II. Brief History
Federated Department Stores was founded in 1929, the same year the stock market crash signified the commencement of the Great Depression, with the merger of Abraham & Straus of Brooklyn, Filene’s of Boston, F&R Lazarus & Co. of Columbus, Ohio and Bloomingdale’s of New York. Recognizing economic sensitivity to the Great Depression and WWII, Federated initially focused its efforts on ground-breaking retail tactics such as accommodating credit policies. In the mid to late 1900’s, Federated shifted its endeavors to growth and development, having increased its stores by 400 percent between 1964 and 1979. Although the company filed for bankruptcy in 1988 because of a failed takeover by Robert Campeau, a Canadian real-estate developer, Federated persevered through the tough times by taking risks and embracing change. While originally being composed of four family-owned department stores in 1929, Federated is now comprised of over 450 stores and is known as one of the leading department store operators in the industry.
III. Nature of the Product/Target Market
After co-branding the Macy’s name with local Federated stores in 2003, the Macy’s division became the central focus for revamping. Federated descri...

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... several actions presently being taken to refurbish Federated. The company has hired a new CEO, Terry Lundgren, and also appointed an organization within the company to focus on the further development of the Macy’s home division. Between the diversity of quality employees and vendors, they hope to overcome the premonition that the department store is a dying breed. They are well on their way opening seven new firms in 2004.
Federated, and department stores in general, encompass a huge portion of not only American history but also the American economy. Fred Lazarus, former president of the present day Lazarus-Macy’s, was even responsible for the changing of the Thanksgiving holiday to the fourth Thursday in November. Lazarus suggested this to President Roosevelt in 1939 in order to give consumers more shopping days between Thanksgiving and Christmas thereby improving economic efficiency. Federated also operates the largest store in America, the Macy’s flagship in Manhattan, and sponsors the annual Thanksgiving Day parade. Without retail stores like Federated, America would not only lose a substantial amount of history, but the backbone of our economy.

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