Macy's makeover of Marshall Field's continuesby Martin Moylan, Minnesota Public Radio
It's been about a year since Macy's transformed its recently acquired Marshall Field's stores to the Macy's nameplate. The change came as the big department store chain was trying to create an 800-store national brand. But the retailer has had somewhat of a tough time selling Minnesota shoppers on Macy's, especially shoppers who still long for the glory days of the Dayton's department stores.
St. Paul, Minn. — The Macy's makeover of Marshall Field's gets mixed reviews from shoppers who frequent the 14 Macy's stores in Minnesota.
Kathy Gammon was a loyal shopper of Marshall Field's. She says Macy's is OK. But it's not as good as its predecessors in her view.
"The transition has gone pretty smooth," she says. "But I still prefer the old Dayton's. The old Dayton's, before it was even Marshall Field's. I think the clothing was more thought-out and better put together, and it was just a different type of atmosphere and different store."
That kind of lukewarm reception has put a significant drag on Macy's sales in the region.
Analysts say the 64 former Marshall Field's stores in Minnesota and elsewhere in the Midwest have weighed down Macy's overall performance so far. Last month, Macy's reported second-quarter sales dropped about 2 percent.
A top executive said the turnaround at the Minneapolis-based Macy's North division is going to take longer than expected. Officials would not say how long. Morningstar retail analyst Kim Picciola says Macy's is having more trouble than it anticipated with the Marshall Field's stores.
"It's certainly been a bumpy ride for them in terms of Macy's North and the integration of Marshall Field's," she says. "It doesn't seem it's gone as smoothly as they originally expected."
Macy's says it had the challenge of introducing itself to Midwest shoppers. Other than one store at the Mall of America, Macy's didn't have any stores in the Midwest previously. Many people didn't know what to expect from the chain -- and chose not to shop there.
University of St. Thomas retailing expert Dave Brennan says shoppers were confused by Macy's pricing, product lines and positioning. Brennan says shoppers also felt customer service suffered, as the company cut staff by the hundreds at the former Marshall Field's stores.
"One of the complaints that some of the people have had is there aren't as many salespeople, or they're less well-informed than the ones under Marshall Fields and Dayton's," he says.
But Macy's officials say they see a path to better results.
The company is aiming to position itself below uppercrust retailers such as Nordstroms, but a notch or two above the likes of Herbergers, Kohls and JC Penney.
Frank Guzzetta, CEO of Macy's North, says the division can thrive providing what he calls "affordable luxuries" to middle-class and upper middle-class consumers.
"I see a big growth opportunity in the mid- to upper-tier fashion department store," he says. "It could be upwards of $3 billion if we got it all in sales in regions we operate in. If we just do it right."
Macy's is determined to attract younger shoppers who've traditionally disdained department stores, dismissing them as places were where their parents -- or grandparents -- shop. Guzzetta says the plan is working.
"Our back to school business was sensational," he says. "We have really leveraged a much younger customer that is really a new part of the market, as people have discovered Macy's. That's the reason our junior business, young men's business and our kids' business were so sensational."
\Guzzetta says sales are looking better now for the former Marshall Field's stores in Minnesota and the rest of the Midwest. But he won't disclose any figures.
Some shoppers like the changes Macy's has made in the Marshall Field's stores. Emily Johnson of Stillwater has become a big fan of the new look.
"They do have some pretty stylish clothing now," she says. "I like that. I would say that they have more of an eye toward fashion now than they did in the past."
Analysts say winning over more shoppers like Johnson is critical to Macy's success. The chain is fighting for customers and sales in a period when department stores' share of the retail business has been steadily shrinking.
Department stores claimed only about 4 percent of overall retail spending in 2005, according to the National Retail Federation. That was down from 7 percent in 1993.
- All Things Considered, 09/06/2007, 4:50 p.m.