When Federated Department Stores bought May Co. in August 2006 and said it would convert its brands to the Macy's moniker, the company anticipated plenty of fallout. But the backlash has proved exceptionally strong among devotees of the Field's brand, particularly in Chicago, where diehards have mounted an aggressive PR campaign for consumers to boycott Macy's and for Federated to bring back the Field's name.
Champagne and double points
Rather than capitulate, however, Macy's is looking to lure them back. It's trying private luxury shopping events at Macy's touting high-end designers where former Marshall Field's shoppers can sip champagne, nibble on appetizers and earn double points from the retailer's loyalty-card program. In the 63-store region around Minneapolis -- where some analysts are saying the retailer's same-store sales have been running negative -- Macy's launched a newspaper push. Macy's newspaper ads are also on overdrive in Chicago and Detroit.
It's gone so far, in fact, to try personal phone calls from division Chairman-CEO Frank Guzetta, reaching out to Field's customers and offering $10 coupons to holdouts in direct-mail pieces.
With access to a rich database of former Marshall Field's credit-card holders, it's easy for Macy's marketing team to target the brand's best customers, figure out who has yet to buy something at Macy's and aggressively work to convert them to the Macy's banner.
'They were dreaming'
But are the tactics used enough to convert a stubborn, angry group of loyal Marshall Field's customers? "I think they were dreaming to think this was just going to be an easy transition," said George Whalin, a retail analyst with Retail Management Consultants, based in San Marcos, Calif. "You have consumers who were fiercely loyal to these stores for years and years."
Indeed, the posh affairs contrast drastically with those organized by Jim McKay, an architecture professor at the University of Illinois, who launched the FieldsFansChicago.org website. Since early October, following the conversion of May Co.'s Marshall Field's stores to the Macy's brand Sept. 9, Mr. McKay and a handful of other self-identified "Field's Fans" have been handing literature at the iconic State Street store in Chicago.
The group -- estimated to number in the thousands -- wants its beloved store back and urges shoppers to boycott. "I think it's very conceivable they'll change it back; that's why we are out there," Mr. McKay said.
Taking it to the street
Picketers hand out buttons that say "I want my Marshall Field's," and there have been 25,000 lapel stickers that say "Forever Marshall Field's." And more recently, the group has been passing out bumper stickers that read "Boycott Macy's."
The rejection by this loyal base during the critical holiday shopping season is not only deflating what was beginning to sound like a successful retail turnaround story orchestrated by Terry Lundgren, CEO of Macy's parent company, Federated Department Stores, but is also throwing into question whether the multimillion-dollar branding campaign overseen by Federated's chief marketing officer, Anne MacDonald, is connecting with local shoppers.
The skepticism is hammering a once high-flying stock, especially in the wake of analyst downgrades. When Bank of America retail analyst Dana Cohen downgraded the stock from buy to neutral earlier this week, she also estimated that the May division's same-store sales declined as much as 11% in November. That's in sharp contrast to overall company results, which in November reported same-store sales gains of 8.5%. Federated is not breaking out the May division results.
Ms. Cohen blamed the poor performance on missteps by management. "Federated tried to do too much too quickly at May," she wrote, comparing the September conversions to the staged conversions at Richs' and Burdines.
Additionally, Ms. Cohen questioned whether the Macy's national-TV branding campaign is working. "We think Federated is in the early stages of utilizing this tool and it may take time to find the right voice with the customer," she said.
Even so, retail analyst Mr. Whalin, said strategically the move remains the right one. "It's like going to the dentist and having a root canal, you know you have to do it, but it's going to be painful for a while."