Macy's goes west with brand effort

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Macy's long has had a national brand, thanks to its annual Thanksgiving Day Parade, but the department store is out with a new campaign that may be its first step toward a national advertising effort.

Macy's West, the chain's West Coast division, broke a branding effort March 11 tagged "More you." The campaign is based on strategy developed by WPP Group's Landor Associates and advertising from Havas Advertising's Arnold Ingalls Moranville, San Francisco. Four branding spots and three spots promoting sales are part of a campaign that will include print executions as well as bus sides and other outdoor executions.

During a pitch for the branding assignment, agency representatives were told the campaign would be used for both Federated Department Stores' Macy's East and West divisions. However, initially the campaign will be used only in states west of the Mississippi. Macy's West, operating in six western states, and Macy's East, in 15 states and Puerto Rico, have always each controlled their own advertising messages.

Macy's didn't return phone calls seeking comment.

Although a national presence would give added clout to Macy's e-commerce operation, retail experts believe it will be years before a national campaign would provide a good return on investment.

"Macy's is not a national name," said Kurt Barnard, president of Barnard's Retail Trend Report. "They would have to spend a huge amount on advertising in order to bring the Macy's name to the good people in Peoria," he said. Macy's does not have the national presence of other retailers. "It's not like the Gap. Where there is a fire hydrant, there is a Gap," he noted.

A national campaign may be more appropriate for Macy's in a year or more, Mr. Barnard believes.

Federated also has taken some steps to solidify the Macy's brand during what has become a difficult environment for all retailers, and for traditional department stores in particular. Last month, the company said it will close its New Jersey-based Stern's unit, converting those stores into Macy's and Bloomingdale's. At the same time, it is developing smaller units with the potential to roll out Macy's into smaller markets.

In recent years, Federated has undertaken some limited national advertising for its private-label clothing and kitchenware brands.

Company executives have told Wall Street they expect e-commerce efforts to break even by 2003. Federated initially took a big leap into e-commerce when it acquired Fingerhut Corp. in Feb. 1999 in order to secure its order-fulfillment capabilities during the height of the dot-com hysteria. However, Fingerhut late last year was hit by losses that impacted Federated's financial results.

Federated reported a net loss of $184 million on sales of $18.4 billion for the year ended Feb. 3. But sales at stores open at least a year slipped 1.6% last month. Still, the stock is trading near its 52-week high of $49.90, and not far off its all-time high.

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