Historic Marshall Field's Stores Get New Name

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Federated Department Stores has announced a name change for its Marshall Field's stores, which will now become Macy's. The decision is controversial in the Chicago area where the Marshall Field's name has a historic tradition in retailing. Terry J. Lundgren, head of Federated, talks with host Michele Norris about the decision.


The Second City is once again playing second fiddle to the Big Apple; at least that's the way it's perceived in much of Chicago. Federated Stores, Incorporated, which recently bought the landmark department store chain Marshall Field's, is doing away with the Field's name. In 2006, the stores will become part of another chain owned by Federated, Macy's, which originated in New York. That does not sit well with Second City residents. One headline reads `What are the Macy's guys smoking?' A Web site called KeepItFields.org asked people to join a petition. And we heard from these Field's customers.

Ms. JEANNETTE ROBINSON (Marshall Field's Customer): My name is Jeannette Robinson, and I live on the South Side of Chicago and I've been coming to Marshall Field's since I was little. And I like the name Marshall Field's because Marshall Field's is a part of Chicago.

Mr. MARTY BALO(ph) (Marshall Field's Customer): Marty Balo. I live in Chicago. I'm dropping in the mail right now all my Federated cards: my Bloomingdale's card, Lord & Taylor, Macy's and Marshall Field's. I've canceled all my accounts. I just can't believe that they're doing this. It's just a bad business decision.

NORRIS: Terry Lundgren is chairman, president and chief executive officer of the Federated Department Stores, and he joins us now to talk about this decision.

Mr. Lundgren, how'd you make this decision? Why change the name?

Mr. TERRY LUNDGREN (Chairman, President and CEO, Federated Department Stores): Well, the truth is we need to have a vision and a plan for a new business model. And we now have a national vision for a Macy's and a Bloomingdale's, and that's what we're trying to embrace. And, you know, we went out and we did our market research and we talked to consumers directly about the possibility of a name change and came back with the confidence that if we do our job and treat the customers right and assort the store properly, they'll give us a chance and hopefully shop with us.

NORRIS: So what did those researchers and those customers you talked to have to say about what Marshall Field's meant to them?

Mr. LUNDGREN: Well, there's--you know, what it comes down to, Michele, is two things. One is there's one particular store--it's the State Street store, the original Marshall Field's store--that people have a tendency to come back and talk about. They talk about the tree-lighting ceremony, they talk about the window displays, they talk about the flower show and the Walnut Room. All these things we're going to keep and we're going to hopefully enhance. But the nostalgia is what people talk about more than the merchandise, more than `I got this, you know, dress for this big party at Marshall Field's.' They were more talking about this nostalgia, and it wasn't going it allow that business to thrive, that's for sure.

NORRIS: Well, how do you overcome that? I mean, we have a member of our staff who proposed to his wife in the Walnut Room.

Mr. LUNDGREN: Yeah. Well, you know--and hopefully, his kids will propose to their spouses in the Walnut Room, too, because the Walnut Room will remain.

But you know, what's important, Michele, is--you know, when you ask customers, if the building is the same, if the merchandise is your merchandise, the merchandise that you're looking for, and if it's at the price that you're willing to pay and the environment's correct and the service is at your expectation or above, will you shop in the store if the name on the outside of the building is different? And that's where two-thirds of the customers responded, when you ask the question that way, came back and said, `You know what? I'll give it a try.' They're either neutral--two-thirds were neutral to positive about the name change.

NORRIS: So how will changing the name and bringing the Marshall Field's chain into the Macy's family, the Federated family, make those stores profitable?

Mr. LUNDGREN: Well, first of all, there's a huge leverage when it comes to marketing. You know, we'll have one bag, we'll have one box, we'll have one charge card. We'll have--you know, all of those cost efficiencies will run right through our system. But the marketing potential is tremendous, because now we can go to the best agencies in America, create sensational advertising that you might see from the best marketers in the world whoever, you know, you might believe they are, if they're Apple Computer or Coca-Cola. We can now afford to have that level of marketing for the Macy's brand, do it once and then buy the marketing both locally for the newspapers as well--and radio, but also nationally for radio and television as well, and get that push on a marketing basis that we've never, ever had before.

NORRIS: You know, Mr. Lundgren, it's clear that you're quite passionate about what you do, but I want you to take off your sort of businessman's hat for a minute and think as a consumer. Is there something sad about losing a store that had such a strong personality? I mean, even the sort of cursive script in the label said something about what the store represented.

Mr. LUNDGREN: Sure. I think it's a sad day for those in Chicago who have been so attached to this name brand of Marshall Field's. I do, indeed. And I went to Chicago yesterday. I could have gone to other cities, but this is really an emotional subject, not an economic subject. And again, that's why I chose to go to the city and take the criticism direct on. I wasn't looking for compliments coming out of those press meetings that we had.

But at the same time, the business was not performing well. And the tradition is great and it's wonderful, but the consumers were apparently just not shopping there as much as they once were. And so what would happen is, over time, that business would continue to deteriorate. There is really nothing that was going to turn that business back around again. The competition has changed in Chicago dramatically, so the status quo was not the answer. That I was certain about. Something had to change to turn the business around and to get it moving in the right direction, and this was one of the options and this was the option that we feel is the right one. But it doesn't take away from the sadness that individuals are going to have about losing a brand name.

NORRIS: Mr. Lundgren, thanks for talking to us.

Mr. LUNDGREN: Thanks, Michele.

NORRIS: Terry Lundgren is chairman, president and chief executive office of the Federated Department Stores, Incorporated.

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