Federated scaling back e-commerce operations
By Brian Carroll -- Furniture Today, December 9, 2001
NEW YORK — Federated Department Stores joined a larger retail trend when it said last month it would scale back e-commerce operations at its bloomingdales.com Web site and lay off about 100 people.
The cuts will enable its Internet operations to remain on schedule to break even in 2003, the company said.
Federated is the latest in a long line of traditional retailers planning to focus on what they do best — merchandising, marketing and operating stores — while outsourcing more of their online operations.
Furniture isn't a part of Federated's online merchandising mix, either at bloomingdales. com or the company's macys.com site.
"In the current economic climate, it is important that we use our resources in the most productive way possible," said Jeffrey Sherman, chairman of Federated Direct, the direct-to-customer division based here. "We are looking forward to building on the successes of macys.com while more aggressively pursuing Internet marketing opportunities for Bloomingdale's."
Beginning in February, bloomingdales.com will cease to sell online. The site will be used to market the Bloomingdale's store brand, including its bridal registry, operated in conjunction with WeddingChannel.com.
At macys.com, offerings are being scaled back, but e-commerce will continue. Several apparel categories will be culled. Home, bridal, gifts and jewelry remain for sale on the site because they have been the most popular.
The Macy's catalog operation, launched as a marketing vehicle for macys.com, is being shut down.
One-time, fourth-quarter costs associated with the reorganization are expected to be in the $50 million to $60 million range, including about $40 million for a non-cash writedown of the fixed assets and software capitalization.
Federated, with annual sales topping $18.4 billion at 450 stores, does not break out sales by channel, but for the average big retailer online sales represent 2% or less of total sales.
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