Federated centralizing home goods buying for five store divisions
By Carole Sloan -- Furniture Today, February 8, 2004
NEW YORK — In a sweeping move that brings central buying and merchandising of home goods to Federated Department Stores, the retailer last week announced the formation of the Macy's Home Store for all divisions except New York-based Bloomingdale's.
The move, according to Terry Lundgren, Federated chairman, president and CEO, will strengthen the stores' ability to execute and market home furnishings.
"In home furnishings, we have had excess inventory and not enough consumer demand," Lundgren said. "Our best successes across the board have been where the product is more limited with supply and demand in check, exclusives, high quality and product that is not readily available."
Home furnishing sales for all Macy's-named divisions in 2003 came to $2.6 billion. Federated had total sales of $15.2 billion.
The five divisions affected by the consolidation have 48 home stores between them, and Bloomingdale's has four.
Much of the Macy's furniture business has been directed from a corporate structure. Bernie Gacka, vice president of furniture at Macy's East, has been leading the Furniture Group, reporting to Hal Kahn, chairman and CEO of Macy's East, and Chris Capuano, senior vice president of Federated's Merchandising Group.
Describing the roles of the Federated Merchandising Group and the new Macy's Home Store organization, Lundgren said FMG will focus solely on product development. FMG is now involved in vendor relations, but that will become the Home Store's responsibility.
In product development, Lundgren said, "There will be one decision maker, not five (one for each division, The Bon-Macy's in Seattle, the Atlanta division, Burdine's in Florida and Macy's East and West) and they will know up front whether there is a product need for opening price points or the higher end. The decision process will be faster, easier and clearer."
Within 60 days, Federated expects to have determined the personnel for the Macy Home Store division. About 425 jobs across the company will be affected including general, regional and divisional merchandising mangers, planning executives and assistants, buyers, assistant buyers and clerical workers.
To be determined is how many jobs will be eliminated and which will become part of the new Home Store organization.
It's undecided who will be the top rug buyer, said Charles Cashin, merchandiser for furniture, rugs and mattresses at Federated.
"Every one of the Federated rug buyers is up for the job," Cashin said. "Not to mention the merchandise managers as well. They will also be affected by the changeover. I'm sure there are also people outside of Federated who could be considered for the position."
Rug Editor Lissa Wyman contributed to this story.
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