Field’s to Macy’s

It’s official: Federated will kill the ancient, revered Marshall Field’s nameplate and replace it with the hated Macy’s. Of course I cut up my Field’s credit card and sent a shard of it to Federated headquarters out of sheer pique (and my own rather extreme sentimentality about place), but in the short and long term today’s announcements don’t even make great business sense.

What I posted to Chicagoist‘s comments:

Sure, a stronger brand identity nationwide is generally good for business. What’s curious about this is that Marshall Field’s probably has higher name recognition in the USA than, say, Lord & Taylor — which was spared because it doesn’t quite fit into Federated’s business strategy. L&T isn’t even that special to Manhattanites, unlike Bloomie’s, Saks, and Bergdorf, but somehow it survives?

Whoever buys Lord & Taylor (“exploring strategic options” means “on the block”) would be smart to negotiate the Field’s name as part of their deal. It’s not like Federated has any more use for it, unless they want to keep a department at State Street trafficking in Field’s memorabilia.

[Federated CEO Terry] Lundgren has specifically mentioned State Street as a showpiece in several interviews I’ve seen this year. He admits that Field’s trades at a higher level than Macy’s East, but said something about how Macy’s West in SF and Seattle is similar. (I’ll look up the cites at home.) Apparently, he thinks that he can have the best of both worlds: a national brand name that means different things to different cities. But to realize $500M in “cost synergies,” which the shareholders want, he’ll have to cut back on those less-profitable lines (like, oh, those special things carried only at flagships) and on service. I agree that Macy’s stands for nothing but dark stores and middlebrow selection, dominated by those high-margin but cheesy private labels that investors love.

The marketing push at Field’s in recent years has centered around highlighting State Street as a distinctly Chicago institution and as something special, restoring its faded allure. Federated’s own research indicates that people’s fond memories of Marshall Field’s are all about the State Street grand dame — one of retailing’s greatest momuments — and not their local branch stores. Yet Lundgren won’t promise that the recent (and fantastic) improvements at State Street will stay, only that the bottom line still rules above all else; as he told the Tribune, “Of the coming changes to the historic State Street flagship, Lundgren said, ‘I just know it needs to do better.’ ” This directly contradicts recent (2003-2005) statements by Field’s executives that sales at the chain overall, and State Street in particular, had upticked after many years of stagnation.

That polish behind State Street plays into a broader trend by cosmopolitan consumers to seek local alternatives, or at least local spins, on global trends. Dumbing down the entire chain to a nationwide, thousand-store Macy’s name not only reduces the chain to a commodity level that it will share with Wal*Mart, but also squanders the considerable goodwill that Field’s has engendered over the years: the splendor of State Street, true to Marshall Field’s plans, created a true genius loci. The architecture wasn’t value engineered and yet was magnanimously opened to all. It offered a modern temple of cosmopolitanism and grandeur to the emerging middle classes of the world’s preeminent Modern city. Arguably, in a pluralist city of many denominations, the one religion everyone could agree on was consumerism; Field’s played a key role in changing millions from mere workers to consumers, and the building provided an appropriate place of worship. The resulting emotional connection to shoppers built a powerful brand.

From the Tribune:

“Chicagoans and folks in the central United States tend to be more brand loyal,” said Burt Flickinger, managing director for Strategic Resource Group in New York. “While Field’s was a broken business, it was not unfixable. Federated has taken a broken business and made it a much more broken business.”

Another retail consultant said Field’s could be fashioned into an upscale brand.

“Retailing has been skewed to the low end and the high end. Marshall Field’s would be a powerful high-end brand. Why would you bring it down to the mushy middle?” asked Al Ries, author of the “The 22 Immutable Laws of Branding.”

“This is particularly bad,” he said. “I’d rather have a name that no one has heard of with potential rather than a name like Macy’s that everyone has heard of but has no potential. People know about it, but it will never be perceived as a high-end brand.”

Indeed, the “lost years” at Field’s aside, the brand has significant national cachet since it served its upmarket clientele well for decades. Macy’s has always catered to the mid market.

David Greising has a useful perspective, also in the Trib:

If this all sounds a bit emotional, well, it is. And emotion is what Lundgren and the legions of MBAs that argued for this deal missed when they decided that the Field’s name must go. They relied, instead, on logic and experience.

Trouble is, it’s hard to view Field’s recent history and not get a bit emotional or, as some might indelicately put it, get mad. People get mad because Field’s demise was not an act of nature, it was a result of neglect.

But the hurt is more than just some parochial paroxysm. “Chicago properly should resist this national homogenization to the extent it can,” O’Connor said. “But this is beyond our control, really.”

Field’s is a name that mattered, so Field’s hurts more than the rest.

In the end, a retailer is nothing but a pile of inventory, some lease papers, some employment contracts, and a brand — its “goodwill,” its “emotional bond with consumers”: Emotion _does_ matter in the world of retailing, and Federated doesn’t seem to understand that. Their surveys only asked the up-or-down questions, comparing two incomparable commodities: the long-neglected Field’s and the better-tended, much larger Macy’s. No attempt was made to truly understand the brand’s intrinsic value.

Meanwhile, some (like the mayor) are shrugging and saying, “well, they’re not cutting jobs.” Of course no jobs will be cut locally; there’s no Federated-May overlap here, except for Lord & Taylor. Jobs will be cut everywhere else because there’s substantial overlap. Either way, no jobs would have been cut here, so that simply should not factor into the equation.