No Turn On Red

December wasn’t kind to Macy’s as they saw a 4.0% drop in same store sales and have now announced that they are closing 11 stores. Combining November and December, same store sales dropped 7.5% over last year for the retailer.

Close to 1,000 employees are affected by these store closings – unknown how many fo them will be able to transfer to positions in other stores.

From their press release, the closing stores are:

• Ernst & Young Plaza (Citicorp Plaza), Los Angeles, CA (135,000 square feet; 136 employees; opened in 1986)
• The Citadel, Colorado Springs, CO (195,000 square feet; 105 employees; opened in 1984)
• Westminster Mall, Westminster, CO (156,000 square feet; 110 employees; opened in 1986)
• Palm Beach Mall, West Palm Beach, FL (190,000 square feet; 71 employees; opened in 1979)
• Mauna Lani Bay Hotel, Island of Hawaii, HI (3,000 square feet; 3 employees; opened in 1983)
• Lafayette Square, Indianapolis, IN (160,000 square feet; 84 employees; opened in 1974)
• Brookdale Center, Brooklyn Center, MN (195,000 square feet; 72 employees; opened in 1966)
• Crestwood Mall, St. Louis, MO (166,000 square feet; 176 employees; opened in 1969)
• Natrona Heights Plaza, Natrona Heights, PA (73,000 square feet; 124 employees; opened in 1956)
• Century III Furniture and Clearance, West Mifflin, PA (83,000 square feet; 3 employees; opened in 2000)
• Bellevue Center, Nashville, TN (211,000 square feet; 76 employees; opened in 1990).

These store closings represent a troubling sign of things to come for the retail industry. I believe Macy’s is just the first in a line of retailers to announce downsizing over the next few weeks. Who’s next?

More coverage from the Consumerist, Reuters and BloggingStocks.

Photo above from Flickr user pkeleher. Use under Creative Commons License.

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In case you didn’t realize, today Federated Department Stores changed it’s name to Macy’s, Inc. The name change was first proposed earlier this year, with shareholders approving the change last week. In addition the name change, they also received a new, valuable stock symbol on the NYSE:

Federated first said in March it would change to the ‘M’ symbol from ‘FD,’ and also change its name to Macy’s Inc. Shareholders approved the move in May.

The NYSE does not disclose the exact process it uses to determine whether it will allow a company to have a single-letter ticker, but the assignation is prestigious.

“They’re desirable ticker symbols, valued for marketing reasons and investor relations reasons,” said NYSE spokesman Christiaan Brakman.

In March, NYSE Chief Executive John A. Thain said Macy’s was a good fit for ‘M’ because it is a “marquee name and a brand of great distinction.”

Others single-ticker companies on the New York Stock Exchange _ there are now 16 _ include AT&T Inc., with a ‘T’ ticker symbol, and Sprint Nextel Corp., with an ‘S.’

More from the Associated Press.

Obviously, not everyone is happy with the change. Fans of the Marshall Fields brand have long been blogging at fieldfanschicago.org to express their dismay over Macy’s ditching the Marshall Field’s name and converting all stores to the Macy’s brand.

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The second half of last week was crazy busy for me. Let me catch up on a few of the stories I missed last week:

Fendi sues Wal-Mart over sales of fake handbags:

Italian fashion group Fendi S.R.L. sued Wal-Mart Stores Inc. in U.S. federal court on Friday, accusing the world’s largest retailer of selling counterfeit handbags and passing them off as genuine at its Sam’s Club warehouse stores.

Sam’s Club stores in California, New York, Florida and other states sold knock off handbags, wallets and key chains that were identified as “genuine” Fendi products, according to the lawsuit filed in U.S. District Court in Manhattan.

The suit by Fendi said that Wal-Mart has never purchased its products and never asked Fendi if any of the items bearing its trademark were genuine.

Having never stepped foot into a Sam’s Club, I’m suprised to even imagine that they would carry any Fendi products. This suit will be interesting to watch to see where the blame, if any, lies within Wal-Mart. Is this the case of an over-zealous buyer making sure they’re meeting “always low prices” or is this the case of Fendi not happy that their goods somehow ended up in Sam’s Club?

Good coverage in the comments over at Wake Up Walmart

More about the changes at Federated as the September transition to the Macy’s brand approaches. Here’s the rundown: Macy’s is the brand that people response to the most nationally, even if people in this article are negative about the loss of their regional department stores. Expect less promotions and increased private-label and exclusive offerings, as well as stores tailored to the region that they are in, so that Federated can maintain some of the things that people loved about all of the chains that they’ve swallowed up. Very informative article, though.

And lastly, two food-related quickies about two different chains who are being compared to Starbucks:

First is Dunkin Donuts, who are obviously competiting in the same space as Starbucks (in the sense that they both sell coffee). Boston.com has an article outlining the future growth plans of this chain. The plan calls for 15,000 U.S. locations in 2020, up from 5,000 today, and this will be done through a variety of store layouts and prototype as well as increased product offerings to drive afternoon business.

Is this all being done in an effort to compete with Starbucks? Not so much, it seems. As a loyal dunkin Donuts coffee drinker, I think that as much as these two brands concentrate around the same product (coffee), there is not too much overlap in their philosophy and themes, so I can see both of them co-existing pretty well in the world we live in. Seriously, though, whoever thought that there will be a day that we will live in a world with tens of thousands of locations of the same two stores?

The other eatery being compared to Starbucks doesn’t deal with coffee, but instead deals with ice cream.

USA Today has an article outlining the future growth of Cold Stone Creamery and the ice cream business in general. Two quotes that sum up this article really well are the following:

Cold Stone doesn’t just sell sundaes and sorbet, it sells sizzle. “It’s like Starbucks for kids,” says George Carey, president of Just Kid, a consulting firm.

and

An industry that once sold ice cream now is selling an ice cream experience.

Tonight I went to Friendly’s to get a large Reese’s Peanut Butter Cup sundae. I’m not concerned with the experience, I just want good ice cream. But with that said, it will be very hard for me to resist the new Cold Stone Creamery that they are building three minutes from my house.

That’s all I got tonight.

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The May comp store numbers for the retail industry:

In the mall: Abercrombie up 3.0, Aeropostale down 1.1, American Eagle up 11.0, Ann Taylor up 12.0 , Hot Topic down 6.0, Limited Brands up 7.0, and Pacific Sunwear down 2.6. Gap as a company was down 6.0, however the break down between companies is interesting. Gap North America was down 5.0, Gap International is down 13.0, Old Navy was down 8.0, but Banana Republic is starting to show signs of a turnaround with a 3.0 positive comp.

In the department store sector: Dillard’s up 3.0, Federated up 9.2, JC Penny up 11.1, Kohl’s up 3.1, Nordstrom up 7.8, and Saks up 5.7.

In the battle of Target v. Wal-Mart and warehouse stores v. warehouse stores, Target was up 5.7 & Wal-Mart was up 2.0. Sam’s Club was up 4.0 while BJ’s Wholesale was up 4.2 and Costco was up 10.0.

Generally a pretty positive month across the board. Gap continues to struggle and Kohl’s is curiously one of the few companies with positive marks that didn’t beat investor estimates. Pacific Sunwear was down 2.6 after a fantastic April in which they posted a 14.0 positive comp.

Minyanville posts a good roundup of the May numbers, covering some retailers I didn’t cover here.

Interesting month and a good start to the Summer season in retail.

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The Arizona Republic has an article about Robert Mettler, the CEO of Macy’s West, regarding the future of Macy’s and the transition of the Robinsons-May brand to the Macy’s nameplate this fall. The article, “Macy’s West CEO oversees updates“, is very informative about how Macy’s looks to differentiate itself in this very crowded retail marketplace. Some hightlights:

Macy’s in San Francisco’s Union Square is a celebrity among department stores.

The palatial 600,000-square-foot store boasts a women’s shoe selection so jaw-droppingly gigantic that the department alone employs 100 people. Tucked inside the cosmetics department is a Brow Bar, a sleek walk-in salon where shoppers can get an eyebrow arching for $18 and tweeze for $20. The juniors floor has a DJ who spins music that is edgier and louder than the tunes piped in throughout the rest of the store.

Rounding out the amenities are a post office, sushi bar, iPod vending machine and demonstration kitchen that recently hosted famed chef Daniel Boulud.

It sounds like I could take a week’s vacation in that store alone.

Also:

Mettler hopes to win over shoppers – and their wallets – by providing a shopping experience exclusive to Macy’s.

“We understand that something has to change in order for us to attract customers,” Mettler said. Mettler promises new merchandise more often. More staff on the sales floor and better customer service. More in-store events, such as fashion preview evenings where women can mingle and drink wine.

Some of the departments will be rearranged, with clothing racks and tables spaced farther apart to make shopping easier. The company also will renovate restrooms and dressing rooms.

After years of the trend of retail stores seemingly catering to the lowest common denominator, it is is delighting to see a mass market merchant buck the trend by spending money and re-focusing on the customer experience. What is bringing the shopper into the store, what is keeping them there and what is going to get them back? Federated seems to be focusing on these areas and we’ll see if this continues to pay off in the long run.

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