FIELD'S OF THE FUTURE:
A 21st-Century Marshall Field's for a
21st-Century Chicago
Part 1:
August 12, 2011
MARSHALL FIELD'S: CONSTANTLY CHANGING,
A MODEL FOR THE 21st CENTURY
The story of our great city of Chicago--its
very destiny as one of the world's premier cities--was forged with
much thanks to Marshall Field & Company. Thanks Field's, for
your philanthropy--for the Art Institute of Chicago, the University of
Chicago, the Shedd Aquarium, the Merchandise Mart, and of course, the
Field Museum. It is no wonder that five years later, four out of
five Chicago shoppers still want Marshall Field's to return,
especially to State Street.
Some say that if Marshall Field's were to
return, it would never be the same as before, ... and in the most
positive sense they are correct. That is because Marshall
Field's sustained its greatness by constantly reinventing itself while
always adhering to a tradition of high quality, value and
service.
Consider that the man Marshall Field ran a
world-renowned emporium in the latter half of the 1800s, yet during
his lifetime he never saw the current State Street store completed,
never heard of The 28 Shop, nor ever ate a single Frango mint.
All that was yet to come. Marshall Field & Company kept
changing, but always remained uniquely Chicago at its best--bringing
internally renown to the city.
The Marshall Field's of the 1890s was not
the same as the Marshall Field's of the 1920s, just as Marshall
Field's in the 1940s was so different from the Field's experience of
the 1970s.
Marshall Field's on State Street was again
setting a new standard for the American department store when it was
dismantled into just another Macy's. It is complete "bunk"
that Marshall Field's wasn't on the cutting edge when it was replaced
by Macy's in the mid-2000s.
The most recent reinvention of Marshall
Field's was presented on State Street in 2003. Just eight years
ago, with much fanfare, Marshall Field's pioneered the American
version of the "store within a store" concept. The
concept's success grew, and a second implementation was planned for
Minneapolis when Macy's took over. The potential of the latest
version of Field's was cut short by Macy's.
Just last week, the concept of "a
store within a store" was cited as the future of department
stores by Stephen Hoch, a professor of marketing at the University of
Pennsylvania's Wharton School Business.* While Macy's is cited
as dabbling in the concept, Field's supporters know it makes complete
sense for it to reenage at State Street under the Marshall Field's
name because that would best attract the highest-quality and
best-known brands and in-store shops that would not settle for being
in Macy's. The floors that have emptied out at State Street
since Macy's took over attest to the power of the Marshall FIeld's
name.
When we rally for Marshall Field's return
to State Street, it is in part to celebrate its great history and even
engage in some nostalgia. But ultimately, with that history as a
rock-solid foundation, we look to the future with great hope for a new
Marshall Field's as Chicago's 21st-century internationally renowned
emporium.
Part 2:
August 19, 2011
IN BUSINESS ANYTHING CAN HAPPEN:
THE EXAMPLE OF APPLE
In last week's FieldsFansChiago.org
Newsletter, we inaugurated a series of examples that make the
irrepressible case for a reinvented 21st-century Marshall Field's for
a 21st-century Chicago.
This week we answer those who say Marshall
Field's could never come back by considering another extraordinary
example of how an iconic company and brand can come back better than
ever. Please consider the story of Apple.
Apple was founded in 1976, by
"the Two Steves" of Apple (Wozniak and Jobs) who helped to
jump-start the personal computer revolution, developing not only
ground-breaking products but also a certain ethos with a highly
allegiant following dedicated to quality and design in some ways not
unlike supporters of Marshall Field's.
In the mid-1980s, under pressure from Wall
Street, Apple eventually hired a more "corporate-minded"
CEO. When the dust settled, Steve Jobs--Apple's creative
Polaris--was cast out in a contentious internal fight. Many
Apple loyalists were dismayed at Jobs' exile. Jobs set out on
his own, starting NeXT, Inc., an innovative niche computing company
that never became mainstream.
Post-Jobs, Apple's fortunes increased for
six or seven years, but at the expense of innovation and passion among
its engineers, developers and customers. Nevertheless, Apple's
stock peaked in the early 1990s, and financial experts declared that
the removal of Steve Jobs was vindicated.
Yet Apple's fortunes ultimately sank.
Quality and innovation skidded. By 1996, Apple stock had hit
bottom, its product innovation was of dubious potential, and its
formerly legendary quality control was humbled. Analysts started
predicting the closing of Apple and that its plants would be sold to a
rival for the manufacture of Windows-based PCs. At that point,
the minions of Apple fans were looked upon as naive for still pleading
for the return of Steve Jobs to Apple.
But then the seeds of a miracle were
planted. Steve Jobs was asked back to Apple as a consultant, and
Apple acquired NeXT. After all these years, it did happen: the
Apple loyalists' dream of the second coming of Steve Jobs was
realized. Then more unthinkable things happened. In an
amazing show of support, Apple's archrival, Microsoft, acquired 10% of
the company to help it make a comeback. Apple started to
innovate with new products like the iMac, the original iPod and the
rededication of NeXT's computer operating system as Apple's new Mac
OS.
Apple came roaring back.
In 1996, any business expert would have
thought you were crazy if you would have predicted that on August 10,
2011, Apple would exist as an independent company; be led by Steve
Jobs; and be the United States' most valuable company.
But that's exactly what
happened
Today, Macy's may be doing relatively well
in the tumultuous business climate. But history runs in cycles,
with the best ultimately rising the top. With four out of five
Chicago shoppers still pining for the return of Marshall Field's, it
is important to remember what happened with Steve Jobs at
Apple.
Indeed, in business anything can
happen--Marshall Field's can come back, a greater destination than
ever.
Part 3:
August 26, 2011
NATIONAL RETAIL SUCCESS STORIES WITH
LOCAL IDENTITIES:
Neiman Marcus & Bergdorf Goodman,
Toys "R" Us & F.A.O. Schwarz, Walgreen's &
Duane Reade
In contrast to Macy's conversion of
Marshall Field's, the national chains Neiman Marcus, Toys "R"
Us and Walgreens have each acquired local stores, retaining and even
enhancing their local stores' identities, much to the pleasure and
satisfaction of customers and shareholders alike.
In each of these three cases, the national
retailers have recognized the local uniqueness of a local retailer
that they have acquired and have used them as contexts for learning;
as a way of connecting with local customers; and of building
prestige.
Neiman Marcus & Bergdorf
Goodman
Neiman Marcus is a national upscale
specialty retailer in the same category as Macy's Bloomingdale's
stores. Neiman Marcus has 41 stores coast-to-coast in 21 states
plus the District of Columbia. By comparison, Bloomingdale's
also has 41 stores in 12 states plus a single store in the United Arab
Emirates.
Despite Neiman Marcus' national reach, its
parent, Neiman Marcus Group, continues to also run a single store as
the even-more-upscale Bergdorf Goodman in New York City. Neiman
Marcus has no namesake store in Manhattan. Furthermore, the two
buildings that make up Bergdorf Goodman's Fifth Avenue store
constitutes Neiman Marcus Group's largest location, with 25% more
square footage than the largest Neiman Marcus store and 60% larger
than the typical Neiman Marcus location. Neiman's could have
converted Bergdorf's so that they would have a New York City flagship.
just as Macy's converted Marshall Field's on State Street so they
could have a Chicago flagship. Instead, Neiman Marcus Group
respects and sees great value in Bergdorf's history, clientele and
potential.
Toys "R" Us & F.A.O.
Schwarz
Founded in 1862, New York's F.A.O. Schwarz
is considered to be the United States' oldest toy store. Known
worldwide for its New York City flagship, F.A.O. is perhaps best
known to Chicagoans for their Michigan Avenue store that operated in
the 1990s and its operation of toy departments in Carson Pirie Scott's
State Street flagship circa 2003 and at Macy's on State Street circa
2008-09.
Despite its legendary history, F.A.O.
Schwarz has experienced difficult times in the past two decades.
F.A.O. eventually filed for chapter 11 and was purchased by the
massive Toys "R" Us conglomerate. All F.A.O's
stores were eventually closed save for the beloved N.Y.C.
flagship.
If Toys "R" Us had followed
Macy's precedent, the F.A.O. flagship would have been closed since
they already have an N.Y.C flagship. Instead, Toys "R"
Us valued F.A.O.'s history, tourism and inspirational spirit.
Toys "R" Us is even willing to print up special shopping
bags just for one location.
Walgreens & Duane
Reade
Duane Reade is a chain of New York City
drug stores that grew to over 250 locations, permeating much of
Manhattan and the New York City region. Started in 1960, Duane
Reade is not especially key to the Big Apple's history, but its
ubiquity makes it a familiar store with which locals have a love-hate
relationship. Despite a fledgling remodeling program, financial and
management troubles over the past decade led to Duane Reade's
acquisition by Deerfield-based Walgreens. With 7,000 locations
nationwide, including some in the New York tristate area, it would
have been understandable if choice Duane Reade locations were kept and
converted to Walgreen's while the more run-down and less desirable
locations were closed. Instead, Walgreens saw Duane Reade as an
opportunity to connect with the unique clientele of New York
City.
Not only was Duane Reade kept as the store
name, Duane Reade's remodeling program was accelerated, even creating
experimental specialty-format Duane Reades in the Financial District,
Upper Manhattan and Brooklyn. Walgreens is using these stores to
test new concepts that can then be rolled out at certain other
Walgreens nationwide.* Furthermore, certain Duane Reade
brand items were expanded nationally to all Walgreens stores while
Duane Reade's pharmacies were cobranded as being part of the
"Walgreens Pharmacy Network." The new Duane Reade in
the Financial District will likely be the precedent for a new
Walgreens rumored for State and Randolph Streets here in Chicago.
Rather than discard Duane Reade, Walgreens has created a newer and
better Duane Reade in N.Y.C. that in turn influences newer and better
Walgreeens nationwide.
All three of these cases illustrate how
Macy's could rejuvenate Marshall Field's at State Street. The
return of Marshall Field's would create excitement and profits in
Chicago, and, in turn, create a better Macy's, Inc. for its customers
and stockholders.
Bringing back Marshall Field's to at least
State Street, just as Neiman Marcus has fostered its single Bergdorf
Goodman's prime location and Toys "R" Us celebrates its very
special F.A.O. Schwarz location, would restore the highest and best
use to what has always been Chicago's premier retail destination.
Better yet, Macy's could do what Walgreens is doing with Duane Reade,
using Marshall Field's as Macy's, Inc.'s ultimate localization
connection with what the customers overwhelmingly want.
Likewise, when Hilton Hotels took over the
Palmer House and The Drake hotels, Hilton let those locations keep
their storied, international identities, distinct style of service
and, of course their names. This was despite the fact that both
hotels are mailine Hilton locations.
Based on these success stories and others
like them, Macy's could bring back Marshall Field's, and in doing so
it would unlock immense shareholder value, generate enormous goodwill
among Chicago shoppers, and, most of all fulfill the ultimate value of
this unique asset.
Part 4:
September 8, 2011
THE FIRST 150 YEARS WERE JUST A WARM-UP
A Reborn Marshall Field's Means
Greatness for Chicago, Macy's and the World
In 2002, the City of Chicago and all of the
world celebrated the 150th anniversary of Marshall Field's. A
complete magazine section in the Sunday Chicago Tribune
documented Marshall Field & Company's history and world impact.
The sweep of congratulatory ads from top-of-the-line vendors, fashion
figures, designers, and public figures demonstrated the reach of
Marshall Field's stature as a world-class institution.
But, never to rest on its laurels, Marshall
Field's proclaimed that the first 150 years were just a warm up for
the the 21st century.
The next 150 years of Marshall Field's
began with--what else?--another reinvention of Marshall Field's on
State Street. Just eight years ago, in 2003, with much fanfare,
Marshall Field's pioneered the American version of the "stores
within a store" concept for department stores. As noted in
FieldsFansChicago Newsletter No. 28, today's retail experts are making
much of the concept as the future of the American department
store--and Marshall Field's was the first to implement it. Even
Macy's CEO Terry Lundgren has hailed the concept.
Across the Atlantic, other stores like
Berlin's KaDeWe and London's Harrods are stores with one-of-a-kind
locations experiencing great success with the "stores within a
store" concept. London's Selfridges--the store that traces
its lineage to Marshall Field's--is the most prominent and successful
example of this concept.
It is now time for Marshall Field's to come
back better than ever by picking up where it left off on State Street,
leading the way with the "stores within a store"
concept for its next act in the 21st century.
While State Street would be restored to
being the legendary Marshal Field's, Macy's could continue to operate
the acclaimed Water Tower store as its Chicago
flagship.
As successes bear out over time, other
suburban stores could be considered for designations as Marshall
Field's at certain special locations. Such conversions would be
judicious so as not to oversaturate the market with Marshall Field's
stores.
This one-of-a-kind emporium on State
Street, when operated in the unique spirit of Marshall Field's, would
achieve at least four objectives--but the benefits would be boundless
for all involved:
* First, restoring Marshall Field's to
State Street would reclaim for shareholders the maximum value of the
Marshall Field's tradenames and its historic flagship
building.
Marshall Field's tradenames are greatly
underused corporate assets whose shareholder value and impact are
grossly unrealized. In 2004, just before Macy's acquired
Marshall Field's, May Department Stores (MayCo) placed the value of
Marshall Field's tradenames at $419 million. By comparison, the
combined value of all other ten MayCo department store
tradenames--including Lord & Taylor--was just $183 million.
(1) Macy's tradenames combined were valued at $377 million
in 2004 and $487 million in 2007. (2, 3) (Since 2008,
Macy's no longer breaks out this amount in annual
reports.)
The immense value of Marshall Field's
tradenames is most fully maximized when they are used in conjunction
with the historic State Street store. Conversely, the maximum
value of the State Street store is realized when it is operated in
name and style as Marshall Field's.
* Second, restoring Marshall Field's to
State Street would reinvigorate Chicago's international fashion,
design and culinary reputation under Chicago's best-known
name.
During a recent public forum hosted by
Chicago Public Radio at the Chicago History Museum, Chicago Mayor Rahm
Emanuel underscored how Chicago's greatness and growth hinge on
maintaining its status as one of the world's 50 international
cities.
With Marshall Field's on State Street,
Chicago had one of only a handful of the greatest department stores in
the world; a local emporium with something for all; and a culturally
rich, international institution that dramatically elevated Chicago's
global status and influence. It makes no sense to dramatically
reduce the international prominence and stature of Marshall Field's
and Chicago by operating it under a name and style associated
with New York CIty. Is it really productive to grow Chicago's
fashion, design and culinary reputation under the New York-associated
brands of Macy's? Utilizing world-renowned names likes Trend
House, The 28 Shop, the Fashion Incubator and others can best maintain
and build Chicago's stature when operated under the international name
associated more than any other with Chicago--Marshall Field's. At the
same time, Macy's, Inc. would have an international store with a
unique identity for testing what could not be done in a relatively
ordinary department store like Macy's.
* Third, restoring Marshall Field's to
State Street would generate increased revenues for both Chicago and
Macy's (or any department store operator).
Since the State Street store became Macy's,
more than a few very respected shops associated with the 2003
"stores within a store" concept left and scattered to
Michigan Avenue, Oak Street and other areas. While Macy's has
replaced some of these, the store still is not nearly up to the levels
of occupation prior to the conversion. This has resulted in the
reduction of utilized selling space in the store and reduced cachet
for what was once Chicago's third most popular destination. (4)
Escalators and elevators have even been walled off as a result of
shrinking the sales floor of the store.
Moreover, the emptied retail spaces appear
to have resulted in property tax appeals and reductions from the Cook
County Assessor's Office based on "partial occupancy."
Our preliminary investigation at the Cook County Assessor's web site
suggests that the appeals for the six properties making up the State
Street flagship resulted in a tax break of $1.9 million or 35% for
2009. Such property tax breaks were not effective when the store
was Marshall Field's flagship. (5)
Bringing back Marshall Field's would bring
back a number of exclusive brands, labels, designers, and shops that
left when Marshall Field's was discontinued. Informally, we at
FieldsFansChicago.org hear much interest in returning to the store
should Marshall Field's be reborn on State Street. Moreover,
others eager would be eager join the revived emporium for the first
time.
As presented in our last
FieldsFansChicago.org newsletter, the examples of Bergdorf Goodman,
F.A.O. Schwarz, Harrods and others demonstrate how a single, special
destination store can reach customers in very unique and successful
ways that their parent retail chains cannot.
The reintroduction of Marshall Field's at
State Street with its "stores within a store" would thus
generate more sales traffic and taxes.
* Fourth, restoring Marshall Field's to
State Street would be a tremendous boost to the economy and spirit of
Chicago while generating immense goodwill for Macy's.
For three consecutive years since 2009,
FieldsFansChicago.org has conducted statistically rigorous, anonymous
surveys of Chicago shoppers on State Street and Michigan Avenue.
The overwhelming yearning for the return of Marshall Field's has not
wavered with four out of five surveyed insisting on the return of
Marshall Field's to State Street. (6)
Restoring Marshall Field's to State Street
would create immense positive buzz for Macy's, State Street shopping,
Block 37, the Loop and Chicago. In these difficult times, we
have seen how offering something truly special and unique can be an
overwhelming success. Consider from our previous newsletter the
example of Apple. After almost folding 15 years ago, today Apple
is a wildly successful company and retailer that has bucked today's
difficult times by combining must-have products, top-notch service and
a unique experience.
During a recent interview with Women's
Wear Daily and other members of the press, Macy's CEO Terry
Lundgren said that the time is right to test new concepts and for
"encouraging a higher level of risk-taking across all functions...We
have to try new things - all kinds - and if one of them doesn't
work, that's OK." (7)
As we begin the 21st century with difficult
times, it is perfectly clear that restoring and reinventing Marshall
FIeld's on State Street is a low-risk opportunity that would provide
massive excitement, profits, value and joy to all. Four
out of five shoppers overwhelmingly want Marshall Field's
back.
One of our favorite blog entries comes from
a Field's Fan named Zelda, who wrote,
"Now is the time for the restoration of Field's.
It would absolutely warm Chicago's heart, and people would turn out in
droves to shop there. If anything would get people to spend
again, it would be such a turnaround. Lord knows we could use a
sign to reassure us that all will be well again. That's what
Marshall Field's stood for, if you think about. In good times
and bad, it was a gentle reminder of the good life. A fine store
was a reminder of tradition and quality, even in the Great
Depression. We need Field's more than ever."
Marshall Field's has long set an example
for the spirit of Chicago. Having survived fires, relocations,
wars and economic depressions, the return of Marshall Field's is an
eventuality.
The first 150 years were just a warm-up.
Here's to the once and future Marshall Field's, a 21st-century
emporium for a 21st-century world-class city, Chicago.
-----
Footnotes
(2) Federated
Department Stores, Inc. Form 10-K for the fiscal year ended January
29, 2005.
(3) Macy's, Inc. Form
10-K for the fiscal year ended February 2, 2008.
(4) Marshall Field's
literature, 2005; also VisitFields.com (2005) Macys.com
(2006)
(5) Cook County
Asessor's Office Website, cookcountyassessor.com, Property
Search Database, Appeals.
(6)
FieldsFansChicago.org, 2011 Survey Results,
http://www.fieldsfanschicago.org/survey2011.html
(7) Womens Wear Daily,
WWD.com, May 23, 2011, "Macy's Speeds Up Innovation
Agenda."
Revision of 9/9/2011
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