Armani and Ferragamo Discontinue New Merchandise Shipments to Macy's Stores - Customer Service Atrocious!
The consolidation and transformation of the Bon Marche, May's, and Marshall-Fields into Macy's is supposed to be a good thing, right? You have a huge retail merchandising conglomerate, Federated, that has tremendous purchasing power and influence over vendors. Theoretically, they can secure favorable deals with vendors and make a nice profit while passing savings along to consumers.
It appears that some major high end brands are pulling their merchandise from Macy's stores. According to two sales associates at the Macy's Men's Store in San Francisco, both Ferragamo and Armani are pulling new merchandise from Macy's stores. They didn't provide a rationale for the change, but my personal opinion is that it is because Macy's sucks. Rather than raising the bar with their multiple acquisitions and the consolidation of multiple retailers, they have lowered themselves to the lowest common denominator (in this case, the Bon Marche).
The only theoretic benefit Federated has is their real estate - they have many prime locations throughout the US and they can focus their efforts on stores that are performing well and close locations that are underperforming. However, Federated has made a big, BIG strategic mistake by consolidating their acquisition under the Macy's brand and then lowering the quality, service and selection of merchandise.
The addition of a new Bloomingdales's in the renovated San Francisco City Center, only blocks from Macy's on Union Square, represents unnecessary duplication as both are Federated brands.
A recent visit to the Macy's Men's store in San Francisco's Union Square was a nightmare!
Here's a run down of my dealings with Macy's Associate #277632 on Terminal 511 (2/17/07 at 4:27 PM in the SF Men's Store at Union Square):
- The shoe guy was retarded when I asked questions about the shoes - he didn't now which ones were on sale and couldn't really provide any details about the shoes (Nike and Adidas running shoes - pretty basic).
- I told him I take a 9 or 9.5 depending upon the shoe - he repeated it twice and then only brought me the size 9.
- He handed me the box and watched while I struggled to pull the paper wadded up in the toe out in shreds and untie the knotted shoe strings. He didn't offer to help with a shoe horn.
- He partially rang me up and then another associate threw my receipt at me because he wanted the cash register.
Unfortunately, I had to shop at Macy's because I had a gift card to redeem, otherwise I would have made my purchase at Nordstrom. I love Nordstrom. They offer excellent service, a good selection of products AND they have reasonable prices. Neiman Marcus and Saks are too expensive for my budget, but I can splurge at Nordstrom.
I would love to see FD tank during their 4Q Earnings Webcast on February 27, 2007. However, their same store sales were up in November and they reported increases of 8.6% on Feb. 8th. If they had to drastically reduce prices to get hit these sales targets, their revenue may still be out of reach.
A well known investor, Carl Icahn, recently indicated a desire to more than tripled his stake in Federated Department Stores. Mr. Icahn is a well known for shaking things up at GM and Time Warner and he is involved with many other companies. He moves in on companies where he thinks the management is doing a poor job and then tries to get on the Board of Directors. He has had some success and who knows what this will mean for Federated Department Stores.
I think that Federated management is going to get spanked!
There are a number of other interesting comments regarding Federated Department Stores:
How to Kill a Brand
Will Macy's Attract Loyal Customers?
Not Satisfied with Macy's
Macy's Struggles
Marshall Fields by Any Other Name
Macy's Name Change Backfires
Tough Row to Hoe for Macy's
Ciao,
Jeffery in SF
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