Federated CEO Optimistic On Macy's, May -- And Martha
Federated Department Stores said stronger same-store sales and lower costs boosted fourth-quarter earnings 5% higher. And Chairman and CEO Terry Lundgren told CNBC's Becky Quick that the parent of Macy's and acquirer of May Stores is getting "better and better."
Speaking on "Squawk Box," Lundgren confessed that the department-store company "tried to be realistic" in performance expectations, after it acquired May Department Stores -- and risked a culture clash by re-branding its Chicago favorite Marshall Fields chain as "Macy's." But the CEO declared that observers were happily "surprised" by the firm's fourth-quarter earnings. He noted that Marshall Fields results "started out weak," but "they got better" in December and January.
With 90% of its business under the Macy's rubric, Lundgren is seeking investor approval to rename the entire company for the iconic Manhattan-centered brand. He says his firm is "no longer a 'federation' of separate stores," but a an integrated hybrid. As to fears that the somewhat humdrum May arm is not living up to Federated's posh Bloomingdale's and Macy's names, the CEO reassured Quick that "every single month they [May] have gotten better and better" -- and with a new exclusive Martha Stewart brand going to "all May doors," he expects May stores to reach parity "by '07."