MACY'S STORE CLOSINGS: Weak holiday s...

MACY'S STORE CLOSINGS: Weak holiday sales forces Macy's to clos...

There are 23 comments on the Chicago Tribune story from Jan 8, 2009, titled MACY'S STORE CLOSINGS: Weak holiday sales forces Macy's to clos.... In it, Chicago Tribune reports that:

Macy's store closings come after one of the worst holiday seasons in years. The company says it will close 11 underperforming stores in 9 states.

Join the discussion below, or Read more at Chicago Tribune.

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broken

Springfield, IL

#3 Jan 8, 2009
Good business decision, though it should have come about a year ago.
Dave

Chicago, IL

#4 Jan 9, 2009
You may want to check your sources. The Macys.com website shows the following locations being closed (completely different list)

Stores to be closed are located in:

-- 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).

And as someone who has boycotted Macy's since they changed over Marshall Fields, I say "close'em all"!
Joe

Chicago, IL

#5 Jan 9, 2009
It's interesting to see that a similar article in yesterday's Tribune.com generated close to 200 responses in its associated Topix forum, mostly debating how many Chicagoans still want Marshall Field's back.

FieldsFansChicago.org/blog also had a lot of discussion.

What's amazing is how the stores closing aren't even in the Chicago area and just the mention of Macy's has generated such discussion.
perplexed

Rockford, IL

#6 Jan 9, 2009
As Dave noted above; the Trib still has the wrong list of store closings. The list in this article are the stores that Macy's announced in early 2008, not the latest round from 2009. Is anyone at the Trib awake???
pokestradamus

United States

#7 Jan 9, 2009
A lot of people feel that Macy's has needlessly trodden their happy memories underfoot, and the unwavering commitment toward denying generations of customers in the Chicago area any concession on the point of store branding has needlessly created lasting animosity.

That is just not smart management.
macymart

Chicago, IL

#8 Jan 9, 2009
Macy's will declare bankruptcy by the end of the year. Did anyone notice the article in Bloomberg about Messy's writing off $3B of goodwill associated with Marshall Field's? Macy's will be forced to sell some of their brands to just stay afloat. Keep the faith Chicago, Marshall Field's green shall return...
a pox on macys

Lombard, IL

#9 Jan 9, 2009
macymart wrote:
Macy's will declare bankruptcy by the end of the year. Did anyone notice the article in Bloomberg about Messy's writing off $3B of goodwill associated with Marshall Field's? Macy's will be forced to sell some of their brands to just stay afloat. Keep the faith Chicago, Marshall Field's green shall return...
Thanks for the mention of the Bloomberg article. Brutal. I'm so glad I don't own any macy's stock.

The link for the writedown story is:
http://www.bloomberg.com/apps/news...

Some parts of the article:
"The charge, to reduce the value on its 2005 acquisition of May Department Stores Co., would be the biggest hit to financial results in 18 years and wipe out a third of equity. It may also make shareholders more negative about a stock that lost 60 percent last year, and bondholders more skeptical about debt whose ratings are hovering just above non-investment grade.“There is still a lot of pain to go” for the company, said Bill Dreher, an analyst with Deutsche Bank AG in New York, who recommends holding the stock. A goodwill charge “is going to make some investors nervous.”

Investors may view a writedown as an acknowledgement by Macy’s that it paid too much for May Department Stores ...

Macy’s eroded profits by slashing prices during the worst holiday shopping season in 40 years to try to jumpstart purchases.

Macy’s Chief Executive Terry Lundgren pursued the May purchase ... The plan hasn’t yet worked, Dreher said.

“It will not go down in the annals of Wall Street as the best merger ever,” he said.“There has been a significant destruction of value in the process.”

“We had our doubts about the May acquisition and have long viewed the company’s credit profile as ‘deteriorating,’” Levenson said,“and now the numbers are beginning to prove us right.”

alabala

Westchester, IL

#10 Jan 9, 2009
All across the US ,locals were unhappy with their city's store name changes. This Lundgren character represents what's wrong with the business schools in this country. The founders originally built their companies reputation on giving the customers what they want. This new bunch operates on the premise of lump it or leave it.
Lou

AOL

#11 Jan 10, 2009
Nobody cares who owns anything,but people do care what the name of the store is.When Dayton-Hudson owned Marshall Fields it was no issue for shoppers because we still walked into Marshall Field's. These head honchos of Macy's are as ignorant and arrogant as any business people can get.Fire them before Macys goes bankrupt so hopefully they'll get NO bonusus.. They're harvesting their own rotten seeds,and it couldnt happen to a more deserving bunch of carpetbaggers..
Hmmmm

AOL

#12 Jan 10, 2009
a pox on macys wrote:
<quoted text>
Investors may view a writedown as an acknowledgement by Macy’s that it paid too much for May Department Stores ...
Are you saying that Marshall Field's wasn't worth what Macy's paid to purchase it?
Mimi

Atlanta, GA

#13 Jan 10, 2009
Man how bad will it get before it will get back to a decent level.
lou

Tempe, AZ

#14 Jan 10, 2009
Macy's carries such inferrior merchandise that it cannot hold a candle to Marshall Fields.

They will never make it in Chicago.
mike h

United States

#15 Jan 10, 2009
anybody here like me -
A marshall fields store closes - big news.
A macy's store - no interest.
I realize by their comercials they have a long history - just no chicago history.
Jay

United States

#16 Jan 10, 2009
a pox on macys wrote:
<quoted text>
Thanks for the mention of the Bloomberg article. Brutal. I'm so glad I don't own any macy's stock.
The link for the writedown story is:
http://www.bloomberg.com/apps/news...
Some parts of the article:
"The charge, to reduce the value on its 2005 acquisition of May Department Stores Co., would be the biggest hit to financial results in 18 years and wipe out a third of equity. It may also make shareholders more negative about a stock that lost 60 percent last year, and bondholders more skeptical about debt whose ratings are hovering just above non-investment grade.“There is still a lot of pain to go” for the company, said Bill Dreher, an analyst with Deutsche Bank AG in New York, who recommends holding the stock. A goodwill charge “is going to make some investors nervous.”
Investors may view a writedown as an acknowledgement by Macy’s that it paid too much for May Department Stores ...
Macy’s eroded profits by slashing prices during the worst holiday shopping season in 40 years to try to jumpstart purchases.
Macy’s Chief Executive Terry Lundgren pursued the May purchase ... The plan hasn’t yet worked, Dreher said.
“It will not go down in the annals of Wall Street as the best merger ever,” he said.“There has been a significant destruction of value in the process.”
“We had our doubts about the May acquisition and have long viewed the company’s credit profile as ‘deteriorating,’” Levenson said,“and now the numbers are beginning to prove us right.”
====
Hmmmm wrote:
<quoted text>
Are you saying that Marshall Field's wasn't worth what Macy's paid to purchase it?
====

The point the article and "Pox" is making is that the brand "Marshall Field's" was appraised at about $437 million when May sold out to Macy's; the State Street store alone was appraised at about $1.25 billion when run as the Marshall Field's flagship; and then there's good will which could be simplified down to the expected value of former Field's customers will shop now shop at Macy's.

So how Macy's paid too much is that a) there's been a great reduction in good will--former Field's customers mostly hate Macy's and shop elsewhere; the brand Marshall Field's isn't being used so that's a $437M value doing nothing; and the State Street store is just another outlet of the New York flagship. In general, Macy's thought they were getting former Field's, Filene's, Foley's, Famous Barr, Robinson-May, etc customers which has a lot of value. Instead those customers have gone elsewhere because they can't stand Macy's. Goodbye good will, goodbye value, goodbye what Macy's paid for MayCo.

In short, Macy's paid a lot for something very valuable and they use it like a door stop.
Hmmmm

AOL

#17 Jan 10, 2009
Jay wrote:
<quoted text>
====
<quoted text>
====
The point the article and "Pox" is making is that the brand "Marshall Field's" was appraised at about $437 million when May sold out to Macy's; the State Street store alone was appraised at about $1.25 billion when run as the Marshall Field's flagship; and then there's good will which could be simplified down to the expected value of former Field's customers will shop now shop at Macy's.
So how Macy's paid too much is that a) there's been a great reduction in good will--former Field's customers mostly hate Macy's and shop elsewhere; the brand Marshall Field's isn't being used so that's a $437M value doing nothing; and the State Street store is just another outlet of the New York flagship. In general, Macy's thought they were getting former Field's, Filene's, Foley's, Famous Barr, Robinson-May, etc customers which has a lot of value. Instead those customers have gone elsewhere because they can't stand Macy's. Goodbye good will, goodbye value, goodbye what Macy's paid for MayCo.
In short, Macy's paid a lot for something very valuable and they use it like a door stop.
It's interesting that you read it that way. I see where Deutsche Bank recommends holding the stock. That leads me to believe tht they don't feel it will fall further.

It also says that they had their doubts about the acquistion. Since it was widely believed that May Co was about to go bankrupt, Macy's might have gotten the stores cheaper buy buying out of bankruptcy court.
Average Chicagoan

Arlington Heights, IL

#18 Jan 11, 2009
Macy's will never be accepted in Chicago.

Chicagoans are simply shopping elsewhere. One day, after a bunch of Macy's stores fail here, we will have a chance to get back Marshall Field's, especially on State Street.

The boycott is working!
Macys

Holliston, MA

#19 Jan 11, 2009
I don't know about in Chicago but the Macy's here in Massachusetts have all foreign speaking employees. To ask a question is nearly impossible and to try to find out something out of the ordinary is horrendous. I worked at Field's all through High School and the shopped in the store all of my life. Macy's is not and never will be Marshall Field's it is steeped toomuch in New York culture. And I agree with the poster above who blamed it on business school graduates. I think most of our mess is due to greedy Harvard and Babson type business school graduates who only want money and a BMW and have no ethics or morals.
Chris G

United States

#20 Jan 11, 2009
TRIBUNE get teh story right. These are last years closings. Really can't anyone in the Tribune organization proofread stories first. This is not the first time the Trib has printed wrong information or sometimes I see mispellings and gramatical errors. COME ON GUYS be professional.!!!!!!!!!
Chris G

United States

#21 Jan 11, 2009
Hmmmm wrote:
<quoted text>
It's interesting that you read it that way. I see where Deutsche Bank recommends holding the stock. That leads me to believe tht they don't feel it will fall further.
It also says that they had their doubts about the acquistion. Since it was widely believed that May Co was about to go bankrupt, Macy's might have gotten the stores cheaper buy buying out of bankruptcy court.
I agree the may Company had solicited FDS for seven previous years to be bought out. The Field's acquisition by May was nothing put a ploy to get FDS to buy the entire company. May overpaid for Field's way to much and the sales were not there to support the high price they paid. Their chairman resigned in 2005 after dismal 04 Holiday season for May. If you notice almost all of teh stores that macy's has closed were former legacy May locations. FDS/acy's should have waited becasue May would have filed bankruptcy and then FDs could have gotten the stores at a much lower price and eliminated more of teh duplicate stores they have.

“things that make you go "hmmmm”

Since: May 08

Homewood, IL

#22 Jan 11, 2009
I'm not sorry. Even though none of the closings announced were Chicago stores, I think it was sofa king arrogant of Macy's to delete the Marshall Field's name from the State Street store.
Of course, I haven't set foot in there since the name change.

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