Friday, April 16, 2004

Home goods major focus at Federated

By Randy Tucker
The Cincinnati Enquirer

Shoppers who long for bygone days when major department stores were the first choice for furniture and home furnishings will see something of a revival at stores operated by Federated Department Stores.

Home merchandise categories from textiles to dinnerware to bedding and furniture will be a major focus this year, with several initiatives on the horizon, the Cincinnati-based department store giant said in its 2003 annual report released Thursday.

On the product side, the parent of Bloomingdale's, Macy's and Lazarus-Macy's said this fall it would introduce a home accessories line called Inhabit, which will complement other private brands in the home area.

Also, Liz Claiborne, one of Federated's most prominent apparel suppliers, recently announced it was getting into the furniture business with a new line to be introduced in September. Claiborne officials have said they hope to do business with Federated.

"We believe there is significant opportunity for sales growth and improved profitability in this category," Federated CEO Terry Lundgren said, referring to home goods, in a letter to shareholders.

Home categories generate about 20 percent of Federated's total retail sales of $15.3 billion annually.

"Over the last three to five years, we've seen home sales going through the roof," said Kurt Barnard, chief economist and president of Barnard's Retail Consulting Group. "There are hundreds of thousands of new homeowners, and they will spend lots of money going forward on home decorations and furnishings. It will be a long-lasting feast for retailers in the home-improvement and home furnishing business."

To help streamline its home goods operation, Federated is implementing a more centralized home store strategy under the Macy's Home Store umbrella.

Macy's Home Store operations - including home departments within Federated department stores as well as free-standing furniture galleries - will be consolidated in New York under the leadership of Eric Salus, who heads Federated's Bon-Macy's division in Seattle.

The organizational structure for the new division is not yet decided.


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