Federated faces challenges in keeping former customers

Kathy Olsen of Salt Lake City shopped at ZCMI for years.

When that historic, Utah-based chain was sold to May Department Stores Co. and later became Meier & Frank, she came to love the store under that name, too.

But when Meier & Frank became Macy's last year, Olsen's feelings changed.

"I'm not so crazy about Macy's," she said last week, a Macy's bag in hand.

"It's probably psychological. But it seemed like (Meier & Frank's) clothes were more tailored particularly to me, and Macy's aren't."

Olsen's response to the Macy's brand has been echoed nationwide, as Federated Department Stores Inc. tries to sell shoppers at former May stores on their Macy's replacement.

Local loyalists to regional chains such as Filene's, Marshall Field's and Kaufmann's remain cool to the rebranded Macy's stores that replaced them, some analysts say. Cincinnati-based Federated changed the nameplates of 400 former May Department Stores Co. locations — including eight in Utah — to Macy's in September, along with product selection.

The retailer's decision to switch to the Macy's moniker from the 155-year-old Marshall Field's name still draws angry reactions in Chicago, and shoppers in other cities say they miss their familiar stores. Some analysts estimate sales at the converted stores have declined over the past few months.

Federated acknowledges its strategy of building Macy's as a national brand will take time. The company has not been releasing sales figures on the former May locations, but said this month that those stores improved in December from the October-November trend. Federated reported same-store sales rose 4.4 percent in December, below company expectations of 5 percent to 8 percent, hurt by unseasonably warm weather.

Kimberly Reason, spokeswoman for Macy's Northwest, said that based on anecdotal evidence, it appears the Macy's change has been popular in the Utah and Portland, Ore., markets.

"The biggest adjustments were in our Portland market, because the Meier & Frank name had a stronger and longer history in the Portland market than it did in Utah," Reason said. "(Meier & Frank), quite frankly, did not perform well in Utah."

Reason said many Utah customers have been happy with the regional buying program Macy's has in place, as well as its community giving activities.