Unable to shake name change protests, Macy's shifts Chicago focus

Somewhere between sliding sales and regular protests outside their downtown Chicago store, Macy's Inc. executives realized they had a problem.

Two years after the company bought May Co. for $11 billion and started replacing homegrown department stores with the Macy's brand, anger from stubborn Chicago shoppers over the loss of the iconic Marshall Field's chain refuses to subside.

Macy's executives have struggled in other cities to reel in customers who miss local department store favorites -- including Kaufmann's and Filene's. But nowhere has the task proved more difficult than Chicago.

"There are a lot of people who just can't get over the Marshall Field's name change," said Frank Guzzetta, the former president of Marshall Field's who now is chairman and CEO of Macy's North, one of seven regional divisions. "Those people, no matter how hard we worked at it, have continued to be detractors."

That's why this holiday season, Macy's has all but given up wooing the Field's faithful.

Instead, executives are mounting a full-fledged campaign to bring in new shoppers -- especially those who lack a deep-rooted Field's connection -- to its flagship State Street store.

The changes include a wine bar in the store's Walnut Room -- hallowed ground for generations of Chicagoans who make meals served by tuxedo-clad waiters part of a holiday tradition. There's also free Wi-Fi, the city's only FAO Schwarz toy store and college nights featuring denim fitting clinics -- designed to target children, college students and young professionals flocking to new downtown condos.

The efforts all are flanked by a new advertising campaign, dubbed "Take Me To State Street."

"You have to, at some point, stop and say, 'I apologize. I'm sorry you feel that way' and move on," Guzzetta said. "We wanted so hard to not disappoint the old Marshall Field's customer that we put an excess amount of energy on that and not enough on making sure the store was what everyone wanted."

Macy's won't say how much it is investing to turn around its Chicago business, or how much sales have dropped. But Lord and Taylor CEO Jane Elfers says her chain scored a 12 percentage point bump in sales since the Field's-to-Macy's switch last year.

For Macy's, the stakes couldn't be higher.

"This has to be one of the most critical markets for them to gain acceptance from the shoppers," said Jim Okamura, a senior partner with retail consulting firm J.C. Williams Group. "There's the sheer size of what we've got here, but also it's just such a key proving ground for the Midwest. It has that ripple effect across a pretty broad region of the country."

Executive say they're aiming to double foot traffic in the State Street store over the next three to five years, though they acknowledge holiday sales across Chicago may be flat this year thanks to drooping consumer confidence.

Critics aren't making the transition any easier.

There were more protesters at an anniversary rally outside the store this fall than there were during the initial switch in September 2006, organizers said.

"We're not acquiescing," said Jim McKay, the founder of the anti-Macy's group Field's Fans Chicago, which organizes protests. "It's part of our civic identity, it's part of our history."

Chicago, which gave birth to the mail-order movement led by Montgomery Ward and Sears, Roebuck & Co. during the late 1800s, began its love affair with the dry-goods store that eventually became Marshall Field's in 1865.

Over the decades, the retailer built its reputation on customer service (the company purportedly once sent all its elevator operators to charm school), eventually becoming as synonymous to the city as the Bears and deep dish pizza.

But by the time Federated Department Stores bought May Co. and started shifting stores to the Macy's brand, Marshall Field's reputation eclipsed its reality. Cincinatti-based Federated later renamed itself Macy's.

Last Christmas -- the first for Macy's after the name change-- executives launched an all-out offensive of holiday cheer, blanketing stores with lavish displays and emphasizing over-the-top Christmas traditions.

This time around, as Macy's caters to new clientele, it's redoubling efforts to convince old shoppers it still can have a uniquely local flair. Holiday windows will be decorated to feature the Joffrey Ballet's "Nutcracker."

Macy's also is revamping the State Street layout -- sprucing up its plus-sized women's sections and expanding young men's offerings while moving junior apparel to a large space to accommodate what it hopes is a growing legion of fans. At its store on Michigan Avenue, Macy's is beefing up its popular private label brands like Alfani and I.N.C. It's also remodeling some suburban locations while changing layouts at others.

So far, once-tentative shoppers seem pleased.

Marge Chastain, a receptionist who works in downtown Chicago, cut up her green Field's credit card to protest the switch, but has since become a regular. She scours the sale racks looking for deals for her daughters and grandchildren.

"Even though there was the transition, it's still Marshall Field's to me," she said.