This Tuesday Federated Department Stores closed the deal to sell all 48 of its Lord & Taylor department stores to NRDC Equity Partners for $1.083 billion.
This news follows Federated’s September takeover of all Marshall Fields department stores in the Midwest, furthering the trend of the closing and re-branding of favorite department stores throughout America.
When Macy’s took over Marshall Fields, the Marshall’s retail nameplate couldn’t survive. Many are wondering what will happen to the Lord & Taylor name now that it has changed hands.
Federated currently operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the Macy’s and Bloomingdale’s names. NRDC Equity Partners now owns more than 100 shopping centers, strip malls, and business centers, and recently partnered with Apollo Management in February to purchase Linens-N-Things. Rumor has it that they are interested in purchasing Saks in the near future. With retail and real-estate giants such as these taking over every mall in America, consumers are left to wonder how such consolidation in the department store landscape will change the face of shopping.
In the meantime, NRDC has big plans for Lord & Taylor — most shockingly to close its Chicago store in Water Tower Place and seriously downsize the flagship store on Fifth Avenue in New York.
So, instead of fostering the classic intimacy of a downtown or hometown department store, NRDC will spend $150 million on store construction in suburban areas, opening additional stores in the northeast in strip malls located near residential neighborhoods.
They plan to cater to an upper middle-class consumer with in a price range that falls somewhere between Saks and J.C. Penney.
What do you think about the consolidation within the retail industry? Do you think this creates more viable long-term business opportunities? Or are we simply embarking on a time when one retail giant gobbles up another, and the same tacky plaid overalls grace every storefront in America?