The Right Coast

Editor: Thomas A. Smith
University of San Diego
School of Law

Sunday, September 24, 2006

Elegy for Marshall Field's
Gail Heriot

Well, the dirty deed is done.  Marshall Field's is no more, and the red star of Macy's has risen in its place.  Like many Chicagoans, I am heartborken.

Here in San Diego, some of my friends wonder how anyone could love a department store.  (The department stores here are not all that lovable.)  All I can say is that just as some people love their baseball team or alma mater, some people love great department stores.  In the case of Marshall Field's, arguably the world's first and greatest, many do.  You can shake your head and say that people shouldn't become so attached to a department store.  But that's useless.  People do.  Almost 300 of them showed up to protest the conversion on September 9th, and huge numbers have torn up their new Macy's cards and sent them back to Federated.

It's one thing for San Diegans to be baffled by all this.  It's another for Federated to be.  The folks there are supposed to be merchants, and merchants are supposed to understand the complex human emotions and loyalties that are wrapped up whenever a sale is made.  Yet they seem to have been caught entirely off guard by the fierce opposition they are encountering. 

In Chicago, they understand.  For many there, Field's has been part of the family for generations.  Their Aunt Louise worked there.  Their grandfather took them to see Santa there.  Or (in my case), they bought their wedding rings there.  The enormous State Street Store, once the largest store in the world, is (oh dear, I mean was) a veritable cathedral of commerce with its massive stone columns, its soaring atrium and its stunning Tiffany ceiling.  From its candy kitchen to its exclusive 28 Shop to its antique silver department, there were few material desires that Field's could not satisfy.  Macy's, which specializes in mid-tier mechandise, pales in comparison.  Indeed, brands like Prada and Jimmy Choo shoes, which used to be sold at Field's, have refused to allow their goods to be sold at Macy's for fear of losing their upscale luster.

Field's was an important part of Chicago history too.  It isn't the Macy Museum of Natural HIstory, you know.  Or the Macy Aquarium.  (Shedd was the first president of Field's after Field himself).  The University of Chicago sits today on land donated by Marshall Field, not by Rowland H. Macy.  Most important, Field's may well have saved Chicago after the Great Fire of 1871.  Field himself is credited with quick action in re-establishing his store on the outskirts of the town and with inventing the concept of revolving credit to get things moving again.  Without that credit, Chicagoans who had lost everything (i.e. nearly everyone) would not have been able to re-establish themselves in Chicago.  Many would have been forced to find refuge with friends or relatives in other cities.  Chicago might well have never bounced back.  Marshall Field took a chance on Chicago, and Chicagoans rewarded him with their loyalty.

How much is that loyalty worth now?  We'll find out in the coming weeks.

Meanwhile, the preliminary evidence suggests that Federated may have miscalculated.  Last year, based on its long-term experience in absorbing stores like Bullock's in Southern California and its very recent experience in absorbing stores like Lazarus' in Ohio, Rich's in Atlanta and Goldsmith's in Memphis, Federated announced that the ax would fall simultanously on Hecht's (D.C.), Foley's (Texas), Robinson's-May (Southern California), Filene's (Boston), Famous-Barr (St. Louis) and Marshall Field's.  The reaction across the country by retail analysts and shoppers was that the axing Marshall Field's (but not necessarily the other stores) was probably a mistake.  An on-line petition garnered 60,000 signatures to save Marshall Field's.  Green t-shirts with pro-Field's (or anti-Macy's) themes started showing up in the Midwest.  A song was written to honor Field's and poke fun at Macy's.  Thousands of Chicagoans started wearing "Keep It Field's" lapel stickers.  Federated vacillated, but over the objections of some, CEO Terry Lundgren insisted on going on with the plan--even in the face of a poll taken in the Twin Cities (hardly the heart of Field's loyalty) that found that around about 20% of households planned to substantially or moderatedly decrease their shopping at the store once it was converted to Macy's.  Only a miniscule number said they would shop more.  (Since many households never shopped at Field's or Macy's anyway, that 20% is an even larger proportion of Federated's customers.)

Then came more disturbing data.  It turns out quite a quite a few of the supposedly successful Macy's conversions may not have gone so well after all.  Rather than wear stickers, shoppers in Memphis, Seattle and Atlanta just suffered in silence.  But marketing research conducted by Scarborough Research shows that in Memphis, the percentage of shoppers who said they shopped at Goldsmith's was 43% before the conversion.  After the conversion, the figure slipped to 35%.  Similarly, in 2002, 51% said they shopped at Bon Marche.  By 2006, the figure was down to 41% under the Macy's name.  Similar results were obtained for Columbus, Ohio and Atlanta.  Of the cities studied, only Miami was an exception.  None of this bodes well for Federated, which refuses to release its data on sales revenue at these locations.

And the hardest data of all looks bad.  This summer, sales at the stores Macy's planned to convert took a disappointing turn (even before the conversions took place).  Federated attempted to paper over the problem by arguing that the sales were low, because of all the re-modeling.  The problem is there wasn't much re-modeling.

Obviously, I can't say for sure if this is going to be Federated's New Coke moment.  All I can say is they'll never see a dime of my money.  It would be like shopping at the store of the man who killed my grandmother.  And I've been in contact with over a thousand of people who feel at least as strongly about the matter as I do.

If axing Marshall Field's does turn out to cause sales to go south, it will be interesting to watch the fall out.  Will Terry Lundgren face the same ax he gave to Marshall Field's and other stores?  Will Marshall Field's be revived?  Chicagoans will be paying close attention.  And we haven't given up hope.

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