John Melaniphy III predicts the decision could result in a 20% drop in local same-store sales in the first year the 62 Marshall Field's become Macy's. "We feel initially there'll be some backlash," Melaniphy says, adding stores in the Chicago market will suffer the greatest impact. "Certainly, we saw sales slide when Target bought Field's. We've seen sales decline at malls when the consumer is uneasy about a particular retailer or a theater."
However, Chicagoland Chamber of Commerce president and chief executive officer Jerry Roper sees plusses in the move, which takes effect next fall. "We're going to lose zero dollars because the Macy's name across the US, as well as around the world, is bigger than the Marshall Field's name," Roper says. "We'll gain sales by having Macy's promoting this big store around the county and around the world."
The "big store" is the 1.6-million-sf flagship at 111 N. State St., which is on its way to becoming a city landmark, protecting exterior and interior features such as its signature clock, immortalized in 1945 by Norman Rockwell's painting on the cover of the Saturday Evening Post. However, Marshall Field's is a traditional anchor at suburban shopping centers, as well as Water Tower Place on North Michigan Avenue. Roper says Chicago continues to "climb up the global ladder," as the city joins New York City and San Francisco as a location where Macy's draws tourism-driven shoppers.
Some Marshall Field's stores' sales have dropped to the $30-million-a-year range, Melaniphy says, and a $6-million loss of revenue at local stores isn't hard for him to imagine, given the strong emotional ties between the Marshall Field's brand and local shoppers. Nearly 10,000 have signed an on-line petition against the name change, he notes. A poll by talk radio station WLS-AM found 38% saying they will never shop at Macy's.
Roper concedes the name change is an emotional move, one equated locally with renaming the beloved Cubs the Mets, but has faith in Federated Department Stores' own research. "They got a whole different response," Roper says. "I tend to believe their poll as opposed to the emotional ones."
City officials thought they were sending Federated Department Stores president, chairman and chief executive officer Terry J. Lundgren a message earlier this month when they advanced a proposal to make the Marshall Field's flagship store at 111 N. State St. a landmark. Besides requiring Federated Department Stores--and future owners--to preserve historical exterior and interior elements of the 1.6-million-sf building, 42nd Ward Alderman Burton Natarus suggested placing plaques at all four corners of the building, which takes up an entire city block between Washington and Randolph streets.
However, the name change comes without a loss of jobs here, Roper notes. Meanwhile, Lundgren was criss-crossing the country this week announcing job cuts at other stores, which Roper believes underscores the importance of the Chicago market to Federated Department Stores.
"We didn't lose any jobs—-that was huge for Chicago," Roper adds. "They thought this thing through extremely well. They talked to the mayor. They talked to the chamber of commerce. I couldn't be happier the way they're doing this."
If a sales drop comes true, beneficiaries of Marshall Field's financial losses are likely to be Nordstrom's, Von Maur and Neiman-Marcus, Melaniphy believes, and to a lesser extent, Carson Pirie Scott, J.C. Penney and Sears. Malls also will be affected, although the effects will be focused closest to the Marshall Field's—-make that Macy's next year—locations. "The mall owners will be most concerned about retailers in close proximity to Macy's," Melaniphy says. "They might now, within the mall, capture enough cross-shopping as they had in the past."
However, most malls are diversified with multiple anchors, Melaniphy notes. "Woodfield, for example, provides other alternatives in terms of the higher and lower ends of the spectrum, has a diversified merchandising mix, as well as restaurants," he adds.
Marshall Field's place in the Chicago fabric extends beyond the stores launched by the innovative namesake retailer. The Field family once owned the Chicago Sun-Times, WFLD-TV Channel 32, and its name graces the city's Museum of Natural History along the lakefront. However, Roper notes the Macy's division is committed to continuing the Field's philanthropic tradition.
Melaniphy himself is a long-time Marshall Field's customer saddened by the corporate decision. "Their bridal registry—how many Chicago area families register at Marshall Field's?" Melaniphy asks rhetorically. "It's unfortunate for the consumer. This kind of customer loyalty takes time to develop. It's unfortunate there isn't more of an entrepreneurial spirit among retailers."
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