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Federated Department Stores, Inc. is a department store chain founded in 1929 as a holding company in Columbus, Ohio, specializing mostly in retailing clothing, jewelry, dinnerware and watches. The company is currently headquartered in Cincinnati, Ohio and operates almost 1,000 stores in the United States, many under the Bloomingdale's and Macy's nameplates.
In 2005 Federated acquired May Department Stores for $11 billion. The acquisition included L.S. Ayres, Famous-Barr, Marshall Field's, Filene's, Foley's, Hecht's, The Jones Store, Kaufmann's, Lord & Taylor, Meier & Frank, Robinsons-May and Strawbridge's department stores. Also part of the buyout was the bridal and formal unit of May, consisting of David's Bridal and After Hours Formalwear.
History
Federated Department Stores was founded in 1929 in Columbus, Ohio as a department store holding company for Abraham & Straus, F&R Lazarus & Company and William Filene's Sons. Bloomingdale Brothers joined the organization in 1930. In 1945 Federated moved its corporate offices to Cincinnati, Ohio.
Over the next few decades, Federated expanded nationwide, adding Rike Kumler of Dayton, Ohio, Shillito's of Cincinnati (merged in the 1980s as Shillito-Rike's), Burdines of Miami, Florida, Rich's of Atlanta, Georgia, Foley's of Houston, Texas, Sanger Brothers of Dallas, Texas, A. Harris of Dallas, Texas (which was merged with Sanger Brothers to form Sanger-Harris), Boston Store of Milwaukee, Wisconsin, and Bullock's-I. Magnin organization .
Federated is the successor to the Lazarus operation begun in Columbus, Ohio in 1851. Lazarus family members served in prominent positions within Federated through the 1980's. In the mid 1930's, a modern merchandising standard was set when Fred Lazarus (son of Simon) arranged garments in groups of a single size with a range of style, color and price in that size, rather than the other way around. Lazarus based this technique upon observations made in Paris. Fred Lazarus Jr. also convinced President Franklin Roosevelt that changing the Thanksgiving holiday from the last Thursday of November to the fourth Thursday, extending the Christmas shopping season, would be good for the nation's business. A 1941 Act of Congress perpetuated the arrangement.
To support its huge retail operations, Federated has centralized its back-office functions into several large divisions, covering financial services, marketing, merchandising, logistics, and data processing systems. Other retailers' branded credit cards are usually issued and serviced by a third-party bank; Federated is so huge that it runs its own private bank, FDS Bank, which in turn issues and services the proprietary credit cards offered at Federated stores.
In 1990, Federated went bankrupt after its hostile takeover by Robert Campeau's Allied Stores, and then taking over Macy's in 1994 while that company was still emerging from its own bankruptcy in 1992. Federated entered e-commerce late in 1998, and FDS Bank was one of the last credit card banks to allow its cardholders to access account information online (around 2004). The department store chain Stern's, a division of Federated, ceased operations in 2001, and most of its stores became Macy's stores.
May Department Stores Acquisition
On February 28, 2005, Federated Department Stores announced that they would acquire May Department Stores company for $11 billion in cash and stock. Federated would also assume $6 billion of May's debt, bringing total consideration to $17 billion. The deal would create the nation's largest department store chain with over 1,000 stores and $30 billion in annual sales. To help finance the deal, Federated agreed to sell its combined proprietary credit card business to Citigroup. By Fall 2006, the Famous-Barr, Filene's, Foley's, Hecht's, The Jones Store, Kaufmann's, L.S. Ayres, Marshall Field's, Meier & Frank, Robinsons-May, and Stawbridges's brands will cease to exist as Federated will replace most of them with the Macy's masthead, and some with the Bloomingdale's brand. The company has announced that it will sell the Lord & Taylor brand by the end of 2006. The merger was completed on August 30, 2005, after an assurance agreement was reached with the State Attorneys General of New York, California, Massachusetts, Maryland and Pennsylvania.Federated has announced plans to sell 80 store locations in 2006, having pledged in its settlement to sell most of them as viable business', with preference being given to a group of thirteen competitors. This number could fluctuate pursuant to Federated's negotiations with various mall landlords and its final decision regarding using former May locations for its luxury Bloomingdale's operation.
Store counts
- Bloomingdale's - 36
- Famous-Barr - 23
- Filene's - 46
- Foley's - 70
- Hecht's - 62
- The Jones Store - 7
- Kaufmann's - 55
- L.S. Ayres - 12
- Macy's - 424 (app. 730 by Fall of 2006)
- Marshall Field's - 60
- Meier & Frank - 17
- Robinsons-May - 58
- Strawbridge's - 20
- Bridal Group:
- After Hours Formalwear - 459
- David's Bridal – 232
- Priscilla of Boston - 10
See also
External links
- Federated Department Stores on the Web
- History of Federated Department Stores, Inc.
- Yahoo! - Federated Department Stores, Inc. Company Profile
- WOSU-TV Documentary: Many Happy Returns to Lazarus Documentary
- Interview with Charles Lazarus for the Columbus Jewish Historical Society
- Business First Article: Staffers Remember When Work Seemed Like a Family
- Columbus Dispatch Article: Name Change Hurt Macy's: Decision to drop ‘Lazarus’ not a hit here
- University of Cincinnati: Biography of Ralph Lazarus (1914 - 1988)
- Great Living Cincinnatians: Fred Lazarus, Jr.
1929 establishments | Companies based in Ohio | Companies listed on the New York Stock Exchange | Department stores of the United States | Fortune 1000
"Federated Department Stores"