May it add up to excitement
Ray Allegrezza, Editor in Chief -- Furniture Today, March 6, 2005
Math has never been my forte. When I add 11 and 18, I come up with 1. Let me explain.
In our most recent ranking of the Top 25 furniture and bedding retailers, Federated Department Stores is listed as No. 11, and May Department Stores is in the No. 18 spot.
But if Federated pulls off its planned acquisition of May, the new entity, with combined 2003 furniture and bedding sales of $1.399 billion, will bump Wal-Mart, at $1.375 billion, from the No. 1 spot on our list. And that combined figure doesn't include the $135 million in furniture and bedding sales racked up in 2003 by Marshall Field's, which May acquired last year.
Federated CEO Terry Lundgren says his company has taken the first step toward "combining the best department store companies in America, creating a new retail company with a truly national scope and presence."
Some analysts were quick to point out the deal not only will turn up the heat on rivals such as Saks and Dillard's, but also will give Federated better leverage against sharper-priced retailers such as Target and Wal-Mart.
That's all good and well and probably right on the money. But what does this all mean to us in furnitureland, a part of the world not known for many successful national chains?
I was kicking this around with analyst Jerry Epperson, and we agree on this: The merger might create more of what we least need in our business right now — the ho-hum factor.
Successful retailers have a point of view, a definite focus, and provide the consumer with a distinct shopping experience. If Federated's motive for the acquisition is to provide the furniture shopper with a truly exciting experience, both the consumer and Federated will win.
If not, we simply will witness another case of growth for growth's sake.
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