Federated to heat up Atlanta market

By Andrea Lillo -- Home Textiles Today, 3/3/2003 12:00:00 AM

CINCINNATI —

Federated's "reinvent" initiative, incorporating more customer-friendly shopping features, such as centralized checkouts, shopping carts and price checkers in stores, this year will focus on the Atlanta market, as 18 or 19 former Rich's locations are reconfigured.

Federated announced in February that it would shutter stores in the Southeast and combine the Rich's and Macy's nameplates in Atlanta.

Setting aside $100 million for the initiative this year, the company will concentrate on retrofitting stores market-by-market, rather than individually across the country, said Karen Hoguet, cfo, during the company's fourth quarter conference call. Other markets have not yet been determined.

Launched last fall in 40 stores, the "reinvent" program has been getting favorable reactions from both customers and employees, she said, with the two standouts being the improved fitting room environment and the signage. The shopping carts also were positively received.

Responding to a question on possible mergers and acquisitions, Hoguet said that "acquiring and integrating department store companies is one of this company's great strengths," citing Macy's, Broadway and Liberty House. However, the "practical" side was that "we don't see a lot of opportunities out there; it's not a major part of our thinking right now." The company is also more focused on other items such as driving comp store sales.

Though Federated is not happy with its sales performance over the past two years, Hoguet said it has been better than or, at worse, on par with its direct competitors. The snowstorm during Presidents' Day weekend hurt sales for the month, she said, but plans were to make up for it in March and April.

Within the merchandising area last year, furniture was one of the strongest performers in the home department, while small-ticket home items such as textiles, had a tougher year. She added that private label overall climbed 0.5 percent last year, for a total penetration of 16.4 percent.

Twelve units are scheduled to open this year, including six department stores, two Bloomingdale's Homes, and four furniture stores, increasing square footage by 1.6 percent.