Ghosts in the Department Store

From the New York Times on 24 December 2005 in an article by Michael Barbaro:

WASHINGTON - Perhaps no city in America has buried more hometown department stores than this one. First it was Lansburgh's in 1972, then S. Kann Sons in 1975, Garfinckel's in 1990 and Woodward & Lothrop in 1995. Each closing, from bankruptcy or buyout, brought more grief than the last.

So now, with Washington's last local department store, the Hecht Company, set to disappear after Christmas, what kind of public outpouring can be expected?
"It's not a big deal to me," said Deloris Scott, 49, who has shopped at the chain for more than a decade.

Dietrich Maager, 62, standing in the men's department of the chain's downtown store, asked and answered his own question: "Will I miss it? No."

So much for nostalgia. For nine regional department stores whose grand family names have defined communities for the better part of a century - Kaufmann's in Ohio, Famous-Barr in Missouri, Meier & Frank in Oregon, to name a few - it has come to this.

Shoppers say the stores have already lost their local identities and, with it, their customers' loyalty.

So when it became clear that these storied local brands would be unceremoniously replaced by Macy's stores as part of a merger of the Federated and May chains, consumers responded, for the most part, with a collective shrug. In Boston, the excitement was tangible when rumors began to swirl that the downtown Filene's building, which will be sold by its new owner, might be replaced by a Target.

It is an ignoble denouement for a collection of family merchants that profoundly shaped American culture, turning what had merely been an idea - a consumer democracy, where fashion and luxury were available to anyone to try on, buy or aspire to - into a brick-and-mortar reality.

But it is not, in the end, a surprising one. The regional department store has struggled for relevance and profits for decades. Its sprawling, one-stop-shopping structure, so vital to its early success, made it an all-too-easy target for competitors. Entrepreneurs began to bite off business, one department at a time, until there was nothing left for the department store to call its own.

Suddenly, there was Crate and Barrel for furniture; Circuit City for electronics; Gap for casual clothes. Department stores retrenched, focusing on fashion, but not even that worked. Over the last decade, apparel sales at department stores have fallen by $7 billion, according to the NPD Group, a market research firm.

Mergers, intended to give department stores strength in numbers, seemed only to hurt them, turning companies with local quirks into purveyors of "numbing sameness" said Robert F. Buchanan, a retail analyst at A. G. Edwards, the financial company. (This holiday season, eight of the nine May chains feature the same purple cashmere sweater, digital camcorder and diamond necklace on their Web sites.)

Now it is a merger, once again, that will try to save the department store. Federated, which operates Macy's and Bloomingdale's, has purchased May, owner of Hecht's, Filene's, Robinson-May, Famous-Barr, Foley's, Meier & Frank, Marshall Field's, Strawbridge's, Kaufmann's and Lord & Taylor.

By fall 2006, Federated will turn about 390 of the 487 May stores into Macy's. The 54 Lord & Taylor stores, which may eventually be sold, will keep their name. Federated plans to eliminate 6,200 jobs and sell or close 80 stores in malls and downtowns where there is overlap between the chains.

Federated executives are fond of arguing that shoppers' lack of loyalty for their local department stores will make it easier for Macy's to win over communities. They hint at internal polls, never released publicly in full, that show a majority of consumers would be happy to shop at a Macy's.

But there are plenty of skeptics. "There is a high hurdle for Macy's to clear," said Burt Flickinger III, a retail consultant, who says department stores rely too heavily on aging designers, like Ralph Lauren, who have lost their connection with the legions of young consumers who have turned retailers like Abercrombie & Fitch into a white-hot success.

A. G. Edwards says sales at Federated stores open at least a year, a widely used measure of a retailer's health, have fallen three of the last four years. "They are the best in the industry, but they are losing market share year after year after year," said Mr. Buchanan, the analyst.

In an interview, Terry J. Lundgren, the chief executive of Federated, said the size of the new company would give it greater negotiating power with clothing manufacturers, and he held out the possibility that top designers would create exclusive lines for Macy's once the name change turns it into a national department store. Designers, he said, "are now coming to us" rather than the other way around.

But if consumer reaction - or lack thereof - to the coming name change is any indication, Federated faces an uphill battle. In interviews around the country, shoppers at the chains scheduled to become Macy's talked about the stores as if they were beloved family members whom they had not spoken to in years.

They expressed fondness for the brands, but many confessed they rarely bought much at the stores, relying on them for quick purchases like a pair of gloves or a bottle of perfume.

Andrew and Laree Eby, who live in Portland, Ore., came to Meier & Frank with their young daughter to see the annual Santaland display, which includes a monorail.

Mr. Eby called the chain's demise "sad, because it's a tradition." But asked if he shopped at the store, he responded, "No, and we probably won't shop at Macy's either." "We'd go to Target," he said.

There is at least one notable exception to all of this ambivalence: Marshall Field's, whose elegant State Street store in downtown Chicago, elaborate Cinderella holiday windows and widespread charitable giving have inspired fierce opposition to the name change.

A grass-roots campaign, called Keep It Fields, has created an online petition to stop Macy's from marching into the city. So far, 47,000 people have signed it.
Mr. Lundgren was worried enough about the reaction that he flew to Chicago to announce his decision to retire the Marshall Field's name, even meeting with Mayor Richard M. Daley to placate angry city leaders, who recently passed an ordinance that designates the Chicago store a city landmark.

For the most part, the diplomacy has not worked. "It's horrible," said Susan Brell, 56, as she plucked a box of Marshall Field's famed Frango mints from a Christmas tree at the flagship store. "Marshall Field's is Chicago, it's everything about Chicago and especially at Christmastime," she said. Macy's, Ms. Brell said, "is doing our city a disservice."

But there is no such organized campaign to preserve the May department stores in Portland, Boston or Washington.

Paula Bress, 52, a teacher who lives outside Boston, said the nation's remaining department stores ran together in her mind. "I think of them as all pretty similar now," she said.

A resident of Portland, Kristin Watkins, said she often browsed the 10-story downtown Meier & Frank store, with its Georgian Room restaurant on the top floor, but prefers Pioneer Place, a mall across the street. Meier & Frank, she said, has lost its luster. "Just look at the carpet," she said, pointing to a worn gray carpet in the picture-frames section of the store. "It's just not pleasant aesthetically anymore."

In Boston, home of Filene's, some shoppers mistakenly believed, after the merger of Federated and May, that the discount chain Filene's Basement, a separate entity that is owned by Retail Ventures Inc., would close, setting off a momentary panic. "I don't care about Filene's" department store, said Natalia Navarro, 22, who works at an insurance company in Boston. "So long as Filene's Basement stays here, I'm fine."

In Washington, where the four-story flagship Hecht's store rises like a stone fortress in the middle of downtown, consumers, not to mention the chain's holiday window design staff, appeared resigned to the company's fate. One sparse display, facing G Street, consisted of three perfume bottles on a podium, with a white orchid nearby. "Euphoria," read the writing on the walls. "A new fragrance from Calvin Klein."

Stephanie Weber, a 43-year-old engineer who tried to sneak some Christmas shopping into her lunch break, recalled setting up her wedding registry at Hecht's and buying "the most fabulous dress I own" there, a fancy blue sequined gown. But she is not mourning the chain.

"It's not really a local chain anymore," she said.

Reporting for this article was contributed by Brian Libby in Portland, Ore.; Gretchen Ruethling in Chicago; and Katie Zezima in Boston.