Macy Inc. Finacial Assessment

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By: Frankie Laster
April 22, 2013
ACG 2021

Company History
Macy’s, Inc. was founded in 1929 formerly known as Federated Department Stores, Inc. and wasn’t renamed until June 2007. The company was born through a combination of retailers such as Abraham & Straus of Brooklyn, Filene’s of Boston, F&R Lazarus & Co. of Columbus, OH, and Bloomingdale’s of New York. Each retailer had already gained a prominent presence with a rich history of its own. So in joining together each retailer maintained their separate identities while linking their financial interests and savvy business expertise to develop the revolutionary new company in American retail. Even through the Great Depression and World War II it was apparent that Federated would continue to emerge. By implementing innovative retail firsts such as the “pay when you can” credit policy and the idea to strategically arrange merchandise by size rather than color or price proved the company’s resilience. In 1939 one of Federated Founders Fred Lazarus, proposed a brazen solution when he suggested to President Roosevelt that Thanksgiving be anchored to the fourth Thursday in November rather than fall on the last day of November. This would extend holiday shopping and avoid pushing retailers from the black to the red since there would be fewer shopping days between the Thanksgiving and Christmas shopping season. Making the following day (Black Friday) the most profitable for federated. President Roosevelt supported the proposition, so within the next two years the holiday of Thanksgiving was moved to be celebrated on the Fourth Thursday in November. Since its founding Federated operated as a holding company until Fred Lazarus suggested a bold transition to becoming an operating company to be conducive to the growth and expansive opportunities that lay ahead. After some resistance from the director, Federated was reconstituted as an operating company in 1945, with Fred Lazarus as its president and Cincinnati as its headquarters. By 1964. The number of divisions had expanded from the original five to an impressive 14 and the annual sales skyrocketed to more than $1 billion. By the 1970s Federated expanded into the suburbs with new malls and shopping centers developing everywhere, Federated continued to meet it retail demand for suburbia. Because of this trend, from 1964 and 1979 the number of stores increased by 400 percent and the annual sales quadrupled to $4.8 billion. In 1966 CEO Fred Lazarus stepped down and passed the reins to his son Ralph Lazarus. By this time there was a demand from consumers for lower priced retailers that was recognized and not being met. So by the 1970s federated started a discount division that operated in Florida, Texas and California. At the same time, a wholly owned Federated Stores Realty was developed which resulted in a new string of regional shopping malls with Federated stores as their anchors. By the end of the 70s decade and the celebration of the 50TH anniversary Federated had constructed a new corporate headquarters building in Cincinnati, a total of 20 divisions and the operation of 364 stores. In the 1980s it was made apparent that the retail power house was going to be tested. Amid a period of changes Howard Goldfeder took the reins as CEO from Ralph Lazarus in 1982. The powerhouse continued with its operation even with its longstanding tradition of giving back to the community with the establishment of the Federated Foundation in 1980. Until 1988 things continued to look stable for the corporation. That is until Canadian real estate developer, Robert Campeau turned his sited on the corporation. With a takeover ensued, Federated was forced to file for bankruptcy. With Federates strong leadership and determined operations by 1992, federate emerged as a new and more powerful company. It doubled in size, dove into the internet and e-commerce with macys.com and the acquisition of Fingerhut, a company that was building a sophisticated...
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