I find this scary. I know that many conservatives worry about the New York Times' liberal bias. And they should worry. But geez louise I don't expect the New York Times to turn over its front page news section to what is most likely its biggest advertiser--and to distort the facts to boot. That's either craven, rock stupid or both.
Why would the New York Times refer to Terry Lundgren, Macy's embattled CEO, as "one of the brightest stars in American retailing" in a front page story? This is utter fantasy, and the New York Times presents no evidence of its truth. In the last few months, Macy's stock has declined 40%. Profits are down a whopping 77%. Sales have slumped. The only important marketing decision that Terry Lundgren has ever made in his life was to gamble on the Macy-fication of American retailing--terminating successful regional department stores across the country and turning their locations into Macy's. That gamble has turned distinctly sour. Lundgren's not a bright star; he's a supernova, and Macy's seems well on its way to becoming the black hole of American retailing.
The meat of the Times story is that "Given Fewer Coupons, Shoppers Snub Macy's." That's half right. Customers of the former department stores, especially Marshall Field's, have deserted the behemoth Macy's in alarming numbers. But this has little, if anything, to do with coupons, and Macy's management knows that. It's a convenient excuse for Macy's dismal performance, since it suggests Macy's conversion problems can be corrected without too much fuss. If it's believed, it will pacify Wall Street for a little while--long enough for Lundgren to collect a few more paychecks before investors finally demand his head. But things don't look too good for this "brightest star" these days.
How do I know that the coupon excuse is baloney? I've been pretty active in the movement to save Marshall Field's in Chicago. I wrote a piece in the Wall Street Journal about Marshall Field's and did a broadcast on NPR's Marketplace. (For my previous posts on Marshall Field's, try here, here, here, here, here, here and here.) As part of that I've corresponded with more than 2500 (count 'em) unhappy Marshall Field's shoppers from all over the country and abroad. I even get phone calls from Marshall Field's shoppers, whom I've never met, but who want to let off some steam. I've spoken at length with dozens of Marshall Field's shoppers in Chicago (and more briefly with hundreds). I've read thousands of comments to newspaper stories and blog entries. They refuse to shop at Macy's, but not one has ever mentioned the lack of coupons as a reason. Let me emphasize that: NOT ONE.
Marshall Field's shoppers are angry about a lot of things. They hate Lundgren for terminating the store they love, and they want it back. They're upset at the complete exit of upscale brands from what previously was Chicago's (and likely the nation's) finest department store. (No, I don't agree that the retention of Armani perfumes is the equivalent of the retention of Armani Collezioni. Macy's spinmeisters keep reporting this, and some reporters have dutifully repeated it, but anyone in the media ignorant enough to buy that line should be taken off the retail beat fast.) Some shoppers complain that service has declined precipitously as veteran Marshall Field's salesmen are replaced with witless, minimum-wage teenagers. Others are concerned about the quality of Macy's house brands. And yes, everyone seems to be baffled by Macy's faith that it can increase sales by re-packaging Martha Stewart--a longtime K-Mart brand--for the department store trade. It didn't work for the now-bankrupt KMart, and it is unlikely to work at any department store, let alone the former Marshall Field's.
Is it possible that outside the Midwest, in areas where the converted stores were less upscale than Field's, lack of coupons is a problem? Well, here in San Diego, the local Robinsons-May did indeed run coupons in local paper. But in the last year I've been deluged with direct-mail coupons from Macy's. It's difficult to imagine that they should have sent more.
Today's article is not the first front-page flattering piece about Macy's CEO. Last year, on August 26, 2006, the Times ran a puff piece on Terry Lundgren as the brains behind the conversion. In the article, entitled "After Smooth Sales Talk, Stores Take Macy's Name," the Times acknowledged that Macy's focus groups showed that the conversions would be a disaster, but it claimed that Lundgren "had won over detractors"--even in Chicago. It reported that in Oregon, the great grandson of the founder of Meier & Frank originally pleaded with Lundgren to spare Oregon's store, but later changed his mind and claimed that today he "would jump off a building" for him. (Chicagoans wondered how much he was paid for this.) The piece observed that on the eve of the conversions, the threat of protests seemed remote. Everything was apparently going according to Lundgren's plan.
Obviously, the Times spoke too soon. It was apparently unaware that several hundred protestors would indeed protest the Marshall Field's conversion and that they would return in equally-large if not larger numbers the next year.
Maybe it was forgivable for the Times to simply parrot Macy's press releases back in 2006, since even Wall Street hadn't caught on to the problem then. But today is different. Anyone who follows retail securities know what hot water Macy's is in. And anybody who lives in Chicago surely knows. Tens of thousands of folks wear anti-Macy's pins or lapel stickers or have bumper stickers on their cars. Didn't anybody at the Times think that maybe they should be skeptical of Macy's self-diagnosis of the reasons for its failure? (For evidence that the Chicago Sun-Times is also guilty of kow-towing to Macy's, see my earlier post here.)
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