February 28, 2007
Federated Company Name Change to Macy’s Group Inc.
Federated Department Stores Inc. announced on Tuesday that it will be changing it’s name to Macy’s Group Inc. This is part of Federated’s larger efforts to make the Macy’s name a national brand, and comes after years of the Macy’s name replacing some of the best known names in department store history: including Marshall Field’s, a store I was especially fond of.
According to Chairman and CEO Terry Lundgren, the Macy’s name change “more accurately reflects the transformation of our business in recent years.” He added, “Today, we are a brand-driven company focused on Macy's and Bloomingdale's, not a federation of department stores.” Macy’s also got the nod for the name change because the brand name represents 90% of the company's sales.
There’s an excellent blog post up by Alexandra Biesada on Bizmology that looks at the rise of Federated and its chief rival, JC Penney. Both companies are busy revitalizing a shopping medium that once seemed dead - and bringing in younger, hipper customers by partnering with well known brand names: Federated partners with Martha Stewart and Elie Tahari while JC Penney partners with Liz Claiborne and Nicole Miller and offers in-store Sephora shops.
Federated, partly through aligning its strategy around the Macy’s brand name, has shown some very strong profits. Eli Portnoy notes on The Brand Man Speaks blog that in changing the (unknown) Federated name to the (well known) Macy’s name, the company is emulating Target's similar move and, at the same time making itself more attractive to investors.
I think that this is an excellent move on the part of Federated. As Lundgren told Women’s Wear Daily, adding the word “Group” to the name is a nod to the well known Bloomingdale’s brand name. It’s also a reflection of the way the Neiman Marcus Group operates Bergdorf Goodman or the J. Crew Group, which also has Crewcuts and Madewell in its fold.
I was interested as well to read that Macy’s in-house Hotel brand name is one of its fastest growing lines - surely what is good for the Macy’s brand name is good for this one as well.
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