Shareholders of Federated Department Stores Inc. voted overwhelmingly yesterday to change the company's name to Macy's Inc. to take advantage of a name known in retailing for 149 years.
The company said at its annual meeting that 88 percent of the votes approved the name change. Federated bought Macy's in 1994, and most of its stores now use that name.
Separately, chief executive officer Terry Lundgren said yesterday that the company, in an about-face, plans to increase promotions at former May Department Store Co. locations to boost lagging sales.
Federated will increase the number of coupons and other discounts at former May locations to levels seen last autumn to get more customers in the stores, Lundgren said. Federated had cut back on the promotions in an effort to boost profit margins.
"The most important thing is to get sales moving in the former May locations, and I am prepared to spend money to do that," Lundgren said. Federated will increase television advertisements, he told reporters after the annual meeting. He declined to detail the promotions.
Federated, which acquired May in 2005 and changed the stores' names to Macy's last year, is still aiming to reduce promotions long term so that all Macy's locations operate on the same calendar of less-frequent discounts, he said. The former May locations included the Strawbridge's retail chain in the Philadelphia area.
"We are going to slow the rate of change in the fall season so we can get the consumer gradually weaned off them," he said. Lundgren said earlier this week that sales at the former May stores were "disappointing."
Stockholders voted to adopt the new company name nine months after Federated doubled the number of Macy's locations to more than 800. The company, the second-biggest U.S. department-store chain, will become Macy's on June 1.
The name change "will increase awareness of Macy's, which represents 90 percent of our business," Lundgren told shareholders. The company also owns the 39-store Bloomingdale's chain.
Analysts have applauded the company's decision to rename itself after its flagship Macy's store as a way to further emphasize the brand with investors and the marketplace.
In addition to Strawbridge's, Federated already has re-christened some regional department stores - including Marshall Field's, Foley's and Filene's - that it swept up in its 2005 acquisition of the May Co., distressing some longtime customers at those stores.
Lundgren has said that the name change is an opportunity to reinforce the expansion of the Macy's brand and increase the company's visibility.
Federated, with corporate offices in Cincinnati and New York, operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico. Of the total, 824 stores are now Macy's.
Shares of Federated, which will start trading on the New York Stock Exchange under the symbol "M" June 1, rose 64 cents to $39.70 in New York York Stock Exchange trading. They increased 15 percent last year, less than half the 39 percent gain for J.C. Penney Co.
The company was founded under the Federated name in 1929.
The Macy's division today represents about 90 percent of Federated Department Stores' business. The rest is Bloomingdale's. Some facts about Macy's:
Stores: 824*, including 17 in the Philadelphia area.
Sales: $24.2 billion annually.
Founder: Rowland H. Macy.
Founded: 1858 in New York; first-day sales, $11.06.
Acquired: From bankruptcy, by Federated Department Stores in 1994.
*Includes other chains Federated bought and renamed Macy's, such as May Department Stores Co. outlets.
SOURCE: Federated Department Stores Inc.EndText