[Subdude]

March 1, 2005, 12:55AM
Macy tag may fit Foley's
Longtime local brand is likely to fade by 2006
By DAVID KAPLAN
Copyright 2005 Houston Chronicle

The Federated-May merger most likely means that Foley's, one of Houston's oldest and best-known retail brands, will become Macy's.

Will customers care?

Margaret Harlin has shopped at the downtown Foley's for 37 years. Although disappointed to hear Foley's will disappear, she said she'll give Macy's a try.

"As long as there's still a store here, I'll still come unless prices go up," she said.
graph

Many longtime Foley's shoppers have emotional ties to the department store, but in an age when change is a given and shopping options are plentiful, consumers tend to keep an open mind.

"Department stores are losing loyalty anyway — a name change probably isn't going to have a dramatic impact," said Kit Yarrow, a Golden Gate University professor of psychology whose specialty is consumer behavior.

"The building, location, product selection — the art of being there — rather than the emotion around a name" means more to consumers, Yarrow said.

While no name changes are planned before 2006, Federated Department Stores spokeswoman Carol Sanger said that in all likelihood regional chains such as Foley's will become Macy's, while nationally known brands like Lord & Taylor and Marshall Field's are more likely to keep their names.

"Operating regional stores primarily under one brand means we can advertise nationally, unlike regional retailers, which is more cost-effective," Federated's chairman and chief executive, Terry Lundgren, said in a prepared statement.

Holiday memories
It may take a while for Foley's shoppers to get used to the change.

Rick Drosche, 52, recalls walking as a child with his grandparents to the downtown Foley's during Christmastime.

"It was a fun place for kids," he said. "I remember the fun window dressings and props."

The Bayshore resident still shops there on his lunch break and noted: "They always say your name when you hand them a credit card. Hopefully it won't be a big bummer of a change."

Local shoppers might actually like what they see once Foley's absorbs the Federated culture and becomes Macy's, said George Whalin, president of California-based Retail Management Consultants.

"Federated buys better, displays better, has a greater attention to detail and offers a better shopping experience" than May Department Stores, Whalin said.

"It will be interesting to see if they can keep some of the flavor of a Texas company while making the changes. I have some doubts."

The bigger question is whether the merger will work.

Deborah Weinswig, an analyst with Smith Barney Citigroup, is a big believer.

"The deal makes strategic sense," enabling Federated to become the largest department store company in the United States and to "enjoy synergies and leverage best practices," Weinswig said in a research note on Monday.

Some analysts believe that a post merger-Federated will be in a better position to compete with its upscale rivals at a time when luxury stores are flourishing.

Wendy Liebmann, a retail consultant with WSL Strategic Retail, has speculated that Federated can now take the "good-better-best approach" in which its Macy's brand is the good, Bloomingdale's is the better, and Marshall Field's is the best.

The "best" tier would take on Neiman Marcus, Bergdorf Goodman and Saks Fifth Avenue.

'Reinvent strategy'
During the conference call, Lundgren maintained that Federated will be able to increase margins by expanding its private label brands into the May stores and building on its "reinvent strategy," which includes upgraded sitting rooms, wider aisles, differentiated merchandise and national brand marketing.

Lundgren said that Federated has gotten much better at targeting the demographics of each store location, knowing when to focus on one of four consumer categories: traditional, updated, neotraditional and contemporary.

Federated Chief Financial Officer Karen Hoguet downplayed the idea that Federated will eliminate vast numbers of underperforming May stores.

"They've already done that," she said during the conference call.

However, some analysts believe Federated will close up to 200 May stores. Rivals such as Kohl's, J.C. Penney and Nordstrom are said to be interested in buying some properties.

Under terms of the Federated-May deal, each May share will be converted into the right to receive $17.75 per share of cash and 0.3115 shares of Federated stock.

950 department stores
Once the deal goes through, Federated will own more than 950 department stores and about 700 bridal stores.

Federated will merge May's St. Louis headquarters into its own Cincinnati and New York corporate offices.

St. Louis will, however, remain the headquarters for one of Federated's operating divisions.

Shares of Federated closed Monday at $56.45, down 34 cents. May shares closed down 84 cents at $34.51 a share.

In acquiring May, Federated is taking on a big challenge, Whalin said, and "it will be three or four years before we can say if it worked."

Federated must face "enormous issues, including the shrinking market share of department stores," Whalin said.

"But look what J.C. Penney has done. They were close to going out of business, and now they're doing well.

"It can be done, but it won't be easy."

Chronicle Link

[Subdude]

Article 2:
A century of shopping history
Macy's could change the face of Foley's, but it can't erase our memories
By JEANNIE KEVER
Copyright 2005 Houston Chronicle

Chronicle
Macy's currently has only one store in the Houston area, at the Galleria, while Foley's has a Galleria location plus 15 others.

Forget Wall Street. In Houston, Federated Department Stores' takeover of rival May Department Stores will reverberate most strongly on Memory Lane.

May Department Stores, after all, includes Foley's.

And while we may do much of our shopping at big-box discounters in the suburbs nowadays, most longtime Houstonians have a nostalgic story about Saturday shopping trips to the downtown Foley's.

It might involve a bus ride with their parents or their girlfriends, their first suit, a fancy party dress, a visit with Santa.

For women of a certain age, it even involves white gloves.

"In Houston, Foley's is a department store icon," says Suzette Brimmer, associate chairwoman of fashion merchandising at Houston Community College.

Foley's has been a Houston institution for more than a century, since its founding as a dry goods store on the banks of Buffalo Bayou in 1900.

If the $10.4 billion deal is completed, Foley's will become just another line item in the Federated Department Stores' portfolio. Generally, Federated has absorbed regional department store chains and remade them in the image of one of its best-known brands, Macy's.

That is expected to happen here, too.

Foley's, with 16 Houston-area stores and 69 stores in five states, will go the way of so many of its predecessors.

Remember Joske's?

Beall's? Weiner's? Battelstein's?

A vanishing heritage
Whether the city's retail heritage was usurped and renamed by a new, more powerful owner or simply vanished, much of it is gone.

From his own small vantage point in the Heights, in the independent department store his grandparents founded in 1913, Martin Kaplan has watched the changing retail landscape.

As ever larger chains consumed their rivals, Kaplan's Ben-Hur remained on Yale Street, serving its small but steady base of customers.

"Just thinking about an organization that large is amazing," Kaplan says of the Federated-May deal. "With Sam's, Costco, Best Buy, they have just one model that they replicate and it works pretty well everywhere."

Competitive pressures encourage mergers to survive against Wal-Mart and other mega-corporations.

"It seems like all the big guys are buying up the smaller guys, so eventually we may just have one department store if it keeps up," Brimmer says. "We've got Wal-Mart all over the world. Now what are we going to have — Wal-Mart-Macy's?"

Stores risk their individuality as a result, Kaplan says. "There's a joke about sending snow shovels to all the stores, and you end up with snow shovels in Southern California and Florida, and you have swimsuits in February in Chicago and New York," he says.

But will it really matter if Foley's becomes Macy's?

In one sense, yes. "It's another loss of identity in Houston," says Garth Jowett, professor of communications at the University of Houston. "I seldom go to the downtown Foley's, but I often meet Houstonians who tell me that on Saturdays, their parents would take them down there and they'd buy clothes and ice cream sodas."

'The mercantile hub'
The gazillion-square-foot Foley's stores in the Galleria and at Memorial City Mall are grander, but the downtown store long has been the seat of our collective retail memories.

Old-fashioned, you may think. But last year, the local chapter of the American Institute of Architects awarded the building at 1100 Main its 50th anniversary design award, noting it as "an outstanding example of midcentury architecture," says Houston architect Barry Moore.

It was noteworthy for its windowless facade — it was air-conditioned and didn't need the ventilation of windows — and its masonry details.

"It was the mercantile hub of the city for years and years," Moore says. "The one large, full-service department store downtown that stayed downtown."

Still, he isn't so sure that the name is what matters.

"I think old Houstonians are very fond of the name Foley's, but if they change the name to Macy's and keep it (open), I'll be happy enough," he says. "I'll always call it Foley's."

And the link..

[2112]

This is depressing.

[Subdude]

Downtown Foleys opening day, 1947:

[Sunstar]

This is very sad indeed, but if the downtown Foley's becomes a Macy's it will be better for downtown overall, especially if Macy's puts some money into the location. A nation-wide retailer of their caliber will definitely draw other retailers and hopefully start a boom.

[Subdude]

danax, on Tuesday, March 1st, 2005 @ 8:22am, said:

Hopefully they'll use historically appropriate signage.

<{POST_SNAPBACK}>

You mean on the downtown store? I would imagine not. Standardization of brand, and image is part of the rationale for the re-naming.

[citykid09]

So Lord And Talor is Closing in the Galleria, and now Foley's. That mall is going to go down. Mabe Bloomingdales will take the place of Foley's and Marshal Feilds in Lord And Talylor?

[kzseattle]

citykid09, on Tuesday, March 1st, 2005 @ 11:56am, said:

So Lord And Talor is Closing in the Galleria, and now Foley's. That mall is going to go down. Mabe Bloomingdales will take the place of Foley's and Marshal Feilds in Lord And Talylor?

<{POST_SNAPBACK}>

I would think that Macy would instead vacate it current location and occupy Foley's. After all, that is a much better location. Also, just because Foley's has been taken over and L&T is not doing well doesnt mean that Galleria isnt doing well.

[Parrothead]

The Galleria will never "go down". It survived the 80's intact, it can certainly survive this.

[Subdude]

Well, nice dream anyway.

The Galleria won't be "going down", but assuming Macy's moves to the current Galleria Foley's location, Galleria 3 will be in for a world of hurt. Is there a chance that the Foley's at Sharpstown will be closed, since it's relatively close to the Galleria?

[tw2ntyse7en]

...

[citykid09]

The first time I ever went to the Galleria I went through the old part with my family. It looked really old. Every other time I went to the Galleria I had forgotten about that part, Because I did not know how to get to it. I think back then there was a lot of high class stores in that section.

[tw2ntyse7en]

...

[713 To 214]

First Compaq, now this. . .Too bad for Houston. Somehow, though, I don't think it will be such a big deal a couple of years from now.

[Subdude]

True. The store hasn't been locally owned for years; it really just amounts to a change of name.

[jmancuso]

citykid09, on Tuesday, March 1st, 2005 @ 12:56pm, said:

So Lord And Talor is Closing in the Galleria, and now Foley's. That mall is going to go down. Mabe Bloomingdales will take the place of Foley's and Marshal Feilds in Lord And Talylor?

<{POST_SNAPBACK}>

well, they did open a popeyes, mcdonalds and taco hell with in the past few years, so you maybe on to something. people who shop at versace, armani or nordstroms do not order fried chicken at popeyes.

[ssullivan]

I'm really sad to see this happen. I was hoping a few weeks ago when merger talks were publicly announced that it would go the way of the proposed May-Federated merger that died a few years ago. Unfortunately that doesn't seem to be the case this time.

Macy's does have a history of more than one store in Houston. The first Macy's in Houston was actually the Deerbrook Mall store, which is now a Dillard's. Macy's also operated stores at Willowbrook and Baybrook. Those three stores were sold to Dillard's around 1997. I think at one time they may have also been at West Oaks -- when it first opened it was trying to be a second Galleria with stores like Saks but within a couple of years had refocused to a suburban mall with the current slate of anchors.

Ideally, Federated will keep the Foley's name. They've certainly had a much better track record in Houston than Macy's ever has. However, if consolidation of the brands does occur, I would hope that Macy's would move in the Galleria to the Foley's store, which is 100 times nicer and in a much better location. I don't shop in Macy's at the Galleria mainly because it's inconvenient to get to and because I can't stand the way the store looks. As for the Lord & Taylor store, May had already announced plans to close it. It would be great to see Federated put a Bloomingdale's in that space. Or could we possibly see the return of Marshall Field's to Houston? Talk about a huge market share if Federated managed to fit all three of its brands into the three spaces in the Galleria it will now have access to.

As for downtown, they better keep that store open! While it's definitely not as nice as the newer Foley's -- and could use some updating -- I do like shopping there because it's not as crowded, and it's an easy ride on MetroRail from my home. Losing that store would be a major blow to all efforts to redevelop downtown's retail scene. And yes, Macy's could use historic signage appropriate to the building's architecture. Their flagship store in New York does not use the same signage that is on their modern stores, and it's not hurting their brand one bit. People will know the Macy's name and recognize the store as part of the chain regardless of the font and style of the signage used.

There are a few area stores I'd expect to see as candidates for closure within two or three years as a result of this. I would not expect to see the Northwest Mall location survive, and Sharpstown may be a candidate for closure as well. Less of a possibility, but still a candidate would be Greenspoint, although I think that mall has stabilized and doesn't seem to be bleeding stores like it was ten years ago.

Not only is this whole merger a big loss for Houston, but for other parts of the country. In other areas, names like Filene's, Famous-Barr, Hecht's, Robinson's-May, and others are just as big of an institution as Foley's. This past weekend in Boston I thought about this as I walked down Washington St. past the flagship Filene's store, which is directly across the street from their downtown Macy's location.

[kzseattle]

Subdude, on Tuesday, March 1st, 2005 @ 6:31pm, said:

True.  The store hasn't been locally owned for years; it really just amounts to a change of name.

<{POST_SNAPBACK}>

A couple of years ago, Macy bought Bon Marche stores. In Seattle, nothing really changed except that they renamed Bon Marche to Bon Macy. Macy didn’t even change the signage on any of the stores. I think the change will be minimal in case of Foley's. The Macy store in Galleria, however, will close for certain. A couple of under performing Foley's stores could close but if they are really under performing then they would have closed by now any way since, otherwise, why would Foley's keep them around.

Houstonians are sad at the loss of Foley's as a Houston's icon. Imagine what we felt in Seattle when it lost Boeing, a name that had been synonymous with Seattle for so long. Oh well, at least we still got Starbucks, Microsoft, Amazon and Nordstrom.

[Astro]

Subdude, on Tuesday, March 1st, 2005 @ 9:20am, said:

Article 2:
A century of shopping history
Macy's could change the face of Foley's, but it can't erase our memories
By JEANNIE KEVER
Copyright 2005 Houston Chronicle


..................

<{POST_SNAPBACK}>

Did you see the great 1956 photo of the old Joske's store which accompanied this article? I'm curious where this store was located and where the other original Joske store locations were.

[MidtownCoog]

There was a Joske's at Gulf Gate and also where the Galleria Dillards is located.

[Astro]

OK, the pic must have been the Gulfgate store then. It didn't look like the Galleria Dilards building at all.

[MidtownCoog]

I wonder if they were ever downtown?

You can still see their logo on the Dillards in SA.

[Talbot]

Isn't federated the one that closed one of the tallest department stores in the U.S. that was in Detroits downtown so that they could open up a shopping mall in the suburbs?

If so, hopefully that doesn't happen here.

[ssullivan]

MidtownCoog, on Wednesday, March 2nd, 2005 @ 5:01pm, said:

I wonder if they were ever downtown?

You can still see their logo on the Dillards in SA.

<{POST_SNAPBACK}>

For many years after the Dillard's acquisition, the door pulls at the Post Oak store featured the Joske's logo. When the doors were replaced, the last visible sign of Joske's at that particular location went away.

I'm not sure if they were ever in downtown Houston or not. I kind of think they may have been before opening the Post Oak store, but not 100% positive about that.

[tw2ntyse7en]

...

[rhettsky]

MidtownCoog, on Wednesday, March 2nd, 2005 @ 4:01pm, said:

I wonder if they were ever downtown?

<{POST_SNAPBACK}>

Yeah, although most people don't know it. Joske's occupied the former Foley's store on Main between Preston and Prairie after Foley's moved to its current Main Street store and before Joske's moved to the 'burbs (or what were then the 'burbs, anyway).

The store was a 10-ish-story T-shaped building with a narrow frontage on Main and arms that reached out to Preston and Prairie. It's not there anymore, but you can tell where it was if you look at the block -- it wrapped around the Scanlan Building at Main and Preston, and it filled the gap between the Scanlan and Republic buildings on Preston.

You see the old "Foley Bros." sign that was on the front of that store often in old pictures. It was enormous. I've only seen one picture where the sign was changed to Joske's, but it happened.

[Lowbrow]

I'm rather worried about the 2500 Foley's employees downtown. Administrative staff are prime targets for redundencies.

[MidtownCoog]

I am worried about my lunch time shopping.

Downtown Foley's may not be posh, but it sure works for me.

[ssullivan]

Lowbrow, on Thursday, March 3rd, 2005 @ 11:00am, said:

I'm rather worried about the 2500 Foley's employees downtown. Administrative staff are prime targets for redundencies.

<{POST_SNAPBACK}>

Me too. Many will likely be gone, as May has traditionally kept its regional brands somewhat more inependent than Federated has been doing in recent years.

In some ways I wouldn't mind the change that much if the downtown store stays open and Foley's as a whole climbs back up to the level where it was at the time it was acquired by May in 1988. I think Foley's took a step down and lost a lot of its former glory when that happened. And judging by Federated's stores in other cities that I've shopped in, I do think they, as a whole, do a better job with merchandising and create a classier shopping environment than the average May store.

[skwatra]

"Federated Department Stores announced today that about 330 of the department stores it acquired when it merged with May Co. will take the name Macy's.
ADVERTISEMENT

The name conversion applies to Foley's, which is arguably Houston's best known home-grown retail name."

Merger will turn Foley's stores in Macy's

[MidtownCoog]

Well that sucks.

I like Macy's a lot, but we don't need 8 of them in Houston.

We used to have 3, and now only have one. You think they would have figued it out the first time.

[houstonsemipro]

Bye Bye Macy's from the Galleria. Well, it doesn't matter to me, cause I don't shop at Macy's.

But, look on the bright side of it. Macy's will be turn into apartments. That's what Simon (owner of galleria) said in a article.

[MidtownCoog]

Macy's is moving to the Foley's location in the Galleria.

Macy's, Foley's, Brooks Brothers and Acadamey!

What more does a man need ;-)

[Heights2Bastrop]

I say goodbye and good riddance!

The name “Foley*s” used to mean something special, but it hasn’t been that way for years ever since them damn northerners bought it out years ago. Everything about their operation went downhill from that point – at least in this olphart’s opinion.

[hokieone]

I think you are right on not missing Foley's. It will be interesting to see the impact in terms of some Foley's are in locations where I doubt they would ever put a Macy's. Ex. Texas City, Almeda. Not sure if eventually they will shut those down as it could bring down the brand image. With only one Macy's before, it made the brand seem, whether it was or not, exclusive. Now there will be Macy's all over town. I think it could be good for downtown if they redo that one. And Simon has got to be trying to bring Bloomingdale's to the Galleria now.

[Heights2Bastrop]

If they change the Foley*s at Northwest Mall to Macy’s, that place will become a ghost town!

Oooops! Too late.

[Trophy Property]

hokieone, on Thursday, July 28th, 2005 @ 1:10pm, said:

I think you are right on not missing Foley's.  It will be interesting to see the impact in terms of some Foley's are in locations where I doubt they would ever put a Macy's.  Ex. Texas City, Almeda.  Not sure if eventually they will shut those down as it could bring down the brand image.  With only one Macy's before, it made the brand seem, whether it was or not, exclusive.  Now there will be Macy's all over town.  I think it could be good for downtown if they redo that one.  And Simon has got to be trying to bring Bloomingdale's to the Galleria now.

<{POST_SNAPBACK}>

I still do not understand why Macy's would not just keep the brand as another concept. If there is already a Macy's in one location then they can compete. In the locations you mentioned they could keep the name Foley's. Macy's could also take over the prime Foley's.

What about the downtown Foley's. Will that one become a Macy's or just closed down.

[MidtownCoog]

They better not touch my downtown Foley's.

It's so easy to shop there during lunch. I love it.

[Casual Observer]

So hopefully now, they can do something more practical and useful with Galleria 3?

[hokieone]

Trophy Property, on Thursday, July 28th, 2005 @ 12:13pm, said:

I still do not understand why Macy's would not just keep the brand as another concept.  If there is already a Macy's in one location then they can compete.  In the locations you mentioned they could keep the name Foley's.  Macy's could also take over the prime Foley's.   

What about the downtown Foley's.  Will that one become a Macy's or just closed down.

<{POST_SNAPBACK}>

I agree completely, they seem like very different concepts, even down to the store layouts. The new Foley's in the Galleria looks nothing like a Macy's. I would have thought they could keep them both because in some ways they attract different demographics. I'm guessing maybe the Foley's at the Galleria isn't doing too well financially? Who knows. But I also would agree they should keep the Foley's concept at some of the less high end areas and switch only the ones that make sense to switch. I would think downtown would be a perfect one to switch just because of the name connotation and connection Macy's would have with people from out of town. I know we are all proud of home grown Foley's and all, but progress is progress.

[MidtownCoog]

It's funny when you see companies make a mistake like this.

Like I said, I guess they forgot about the old Macy's in Houston that bit the dust.

[YakuzaIce]

hokieone, on Thursday, July 28th, 2005 @ 1:25pm, said:

But I also would agree they should keep the Foley's concept at some of the less high end areas...

<{POST_SNAPBACK}>

I hope so, I like my Sharpstown Foley's. Also what you said abut the Foley's in the Galleria, I have heard from Sharpstown employees that they are not doing very well.

[citykid09]

Foley's is my favorite department store. Here in Bryan/College Station thats the only place I shop for clothes. Unless I go to Houston where I shop all over Sharpstown mall, and at any Foley's in the city.

[houstonsemipro]

MidtownCoog, on Thursday, July 28th, 2005 @ 11:38am, said:

Macy's is moving to the Foley's location in the Galleria.

Macy's, Foley's, Brooks Brothers and Acadamey!

What more does a man need ;-)

<{POST_SNAPBACK}>

Macy's is not moving in Foley's loaction. Foley's will remain at their current location.

Here is a quote in the article. "Among the stores that will close is the Macy's in the Houston Galleria, which is in the same mall as a Foley's. The Foley's store is a newer store in a prime location."

^^Means that it will be no more Macy's at the Galleria. Simon mention that he will convert the Macy's store into Class A Apartments. This is the only location of Macy's will close down.

Another quote. "Along with Foley's, other department store brands that will disappear include Filene's, Hecht's and Kaufmann's."

^^This means if their a Foley's in your area, it will be transformed into a Macy's. That goes for the downtown location also.

[SpaceAge]

Yes, the Sharpstown Foley's location is one I am very concerned about. I shop there whenever possible. I believe it is the largest department store building in Houston and possibly the state. We have a photo of our family there at it's grand opening and all the good memories others have of the downtown location, we have of the Sharpstown location. You can still see the 1960's design on the south side of the building near the parking garage. It has an accordion folded roof and columns covered in large round rocks.

Does Macy's have a clearance center? Perhaps they could use part of the huge Sharpstown space for that.

[kirbyaustex]

Maybe I'm not understanding what you wrote houstonsemipro. I keep rereading your post, but I'm not sure that I'm reading it correctly. The galleria macy's is closing, and the galleria foley's will become the galleria macy's. It's the only location closing in Houston.

[HeightsGuy]

I know I'm a guy and not that schooled in this sort of stuff, but, honestly, is there really a difference between Macy's, Foleys and Dillards? You could plop me down in the middle of any of the three and I couldn't tell you the difference. For men at least, they all carry the exact same product for the exact same price.

To be honest, I get the same stuff deeply discounted at Marshalls, Ross and TJ Maxx, which I also can't tell the difference between.

The only sad part of this is the name. I'm sure there are die-hard Foley's people out there cringing at the thought of the downtown location taking on the name Macy's. The old Foley's Thanksgiving Day parade always had that rivalry thing with NY's Macy's Thanksgiving Day parade.

[houstonsemipro]

kirbyaustex, on Thursday, July 28th, 2005 @ 2:47pm, said:

Maybe I'm not understanding what you wrote houstonsemipro. I keep rereading your post, but I'm not sure that I'm reading it correctly.  The galleria macy's is closing, and the galleria foley's will become the galleria macy's.  It's the only location closing in Houston.

<{POST_SNAPBACK}>

I explain it clearly. Macy's location will be a Class A Apartments. Foley's will remain at their currect location in the Galleria, cause the Foley's store is a newer store in a prime location.

They haven't mention Foley's will be turn into a Macy's in the Galleria.

y'all getting it mixed up.