"Product Placement" Hits the New York Times' Front Page Gail Heriot

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.)

Comments

[Bob Smith]

Why would the NYT do this? Unlike its tendency to schill for the Democrats, schilling for Lundgren delivers no obvious benefit to them.

[fiona]

Here in South Florida Macy's bought Burdines, which used to be a place where you could get clothes suitable for the climate year round. I had a credit card, which Macy's insisted I change 2x and which I have never used. Macy's ran coupons for a couple years after the change over, but I can no longer find anything I want to buy there.

[Gail]

Bob--Why would a financially-troubled company like the NYT do this for its biggest advertiser? That's what Macy's likely is, you know. If it's not, it's close. Department store ads are consistently the top sector for newspaper advertisements in all substantial papers except the WSJ and USA Today. And Macy's is the 800 pound gorilla of department stores, with special strength in the NYT's key markets--New York, San Francisco, and now Boston, Washington, and Los Angeles. If it weren't for department stores, there likely would no longer be a newspaper industry in this country.

[dearieme]

Clearly what y'all need is to have your poshest department stores taken over by Harrod's of London. That really is run by a pillar of respectability.

[Bob Smith]

Gail, you hit the point: financially troubled. Giving what amounts to free publicity for your advertisers is not the way to financial prosperity, unless you're suggesting Macy's *paid* the NYT to run this news story.

[jimf]

I completely agree with you on Macy's v Marshall Field's ...definitely downscaling...I look at shopping at Macy's like shopping at Sears...they abandoned the upscale dept store to Carsons and Nordstrom and Niemans ...

[Zelda]

Gail, you have hit the nail right on the head, and with great eloquence!
Your Friend in Field's,
Zelda

[L. Grand]

You got it right, Gail. This is definitely bad "reporting." I also read the other NYT article from 2006 - the puff piece you referenced - sounds like Lundgren used excessive flattery to schmooze people. Also, he says things that may SOUND good, but aren't quite accurate. (I'm being facetious, of course. He says things that are about as far away from accurate as the east is from the west.)
The following two proverbs come to mind when thinking of Lundgren:

Psalm 36:2 For he flattereth himself in his own eyes, until his iniquity be found to be hateful.

Proverbs 29:5 A man that flattereth his neighbour spreadeth a net for his feet.

As far as I'm concerned, these two truths not only SOUND good - they ARE accurate. Sad....

[elizabeth]

Gail, you are so right to point out that Macy's grand plan is failing big time. This is true especially in the Chicago area where Marshall Field's was a very respected and successful retailer right up until the day Macy's kicked it to the curb. For the NYT article to suggest that Terry J. Lundgren has suddenly deciphered the Rosetta Stone as to why legions of shoppers have been shunning Macy's--and by golly it's a dearth of coupons--is absolutely laughable. Lundgren has obviously reached the bottom of the barrel of excuses to give his poor shareholders and financial analysts.

[David]

Gail:
Whomever you are, the "New York Times" would do well to hire you as a reporter and rid themselves of the mope who wrote last Saturday's entry.

As I read it that morning I kept thinking: "I NEVER used a coupon when shopping there (Marshall Field's) for the past 15 years!", which is not to say there's anything wrong with using them. Macy's has mailed me numerous ones since the conversion and I ended my credit with them the minute they took over Field's. I still receive and dispose of their mailings- inspite of three requests for them to stop sending them.

The problem I had with the piece was that it didn't present a point of view other than Macy's. The Times reporter (thus the Times) didn't bother to talk with people in Chicago, Minneapolis, Detroit, St. Louis etc. about their experiences with the conversion. I realize all this is selective, but come on...at least make the appearance of an attempt at even-hand-ness.

Gail, thank you! Truth may be in the eye of the beholder, but when it's spoken it's a wonder that is incrediably hard to deny.

-David, Chicagoan (former New Yorker who knew R.H. Macy's which was okay, but no Marshall Field's. New Yorker's should think "B. Altman's" and they'd have a closer to clue as to what we lost when macy's trashed our beloved Marshall Field's.

[gle]

Thank you Gail. You told them! And everybody in Chicago loves your Field's buttons. I have to carry a supply everyplace I go.

[Ward Up]

Gail, thank you for dissecting this latest breach by The New York Times. They clearly have no shame about pandering to one of their largest sources of advertising revenue. They are also sending out a message to other potential advertisers, saying, "Do you want a slanted-in-your-favor front-page story about your business? Just shower us with money!"

[Angie]

Gail, we are unhappy here in Milwaukee as well. We don't have Neiman Marcus or Lord & Taylor, Bloomingdales or Saks. But we did have Marshall Fields. This week, I returned (to what used to be the Fields store) for the first time. Gone were the salon shoes, the designer brands and the hospitable sales staff. The store was close to empty, sales and cosmetic "kids" were standing in groups talking (I suppose there's nothing else to do with no customers) and the merchandise has dropped below what I might call average in quality. (I overheard a lady say "You've got to be kidding! For that?" when she asked how much a hat cost and was told $24. She was still laughing as she exited the department. Even though it was inexpensive, she clearly felt it still wasn't worth $24!!!) I walked thru mourning what used to be a great store. I even went downstairs to the housewares department to make sure the mints were there! I'm not sure what I would've done if they weren't, but I felt like I needed to check. Its such a shame and now Milwaukee no longer has a great department store. We have Boston Store and Macy's - one in the (mediocre) same. We're forced to .com our way thru the retail experience.

[gle]

Something has these comments mixed up. My post above got attributed to David, and something I didn't post is under my name. Is there an editor in the house?

gle
Chicago

[pst314]

To confirm the drop in quality. I was a Marshall Fields customer since the late 70's. They had my loyalty because I could count on them for quality suits and ties and dress shirts, and because they carried business casual clothing in the relatively rare sizes that I wear. Quality sportswear was a plus, but good office wear was essential. But not any more. I can't even find a pair of Dockers in my size. Pathetic.

By the way, I have spoken with people who lived in New York back in the 40's, and they report that even then Macy's was definitely a step below Fields and Boston Store.