- The Washington Times - Tuesday, September 20, 2005

The Hecht Co.’s Arlington headquarters will close in the spring, cutting more than 1,000 local jobs, as the Cincinnati company that bought Hecht’s last month turns the locally started stores into Macy’s.

Federated Department Stores Inc. estimates the job cuts — including 1,033 in Arlington, 1,700 corporate spots in St. Louis and 3,500 divisions jobs in Boston, Houston and Los Angeles — will save $175 million in 2006 and $450 million in 2007.

“It was expected,” said Mark Millman, president of Millman Search Group, a Baltimore retail and shopping center consulting firm. “They’ve got to consolidate. They’re saving hundreds of millions of dollars.

“That’s what happens in mergers. You’ve got to find the money somewhere. … You only need one buyer to add a couple more zeros to whatever you’re buying,” Mr. Millman said.

The job cuts and name changes are a logical extension of Federated’s strategy, Michael Appel, of Quest Turnaround Advisors, a turnaround management and advisory firm in Purchase, N.Y., told the Associated Press.

“Macy’s nameplate is going to take over, and they are streamlining the old divisional operations of the May company and putting them under the Macy’s umbrella,” he said.

Employees whose jobs at the Arlington facility will be cut can apply for positions in Federated facilities and Macy’s stores.

“Some employees will be offered positions in the company’s Macy’s East and Macy’s South divisions that will be responsible for the [former] Hecht’s and Strawbridge stores,” Federated spokeswoman Carol Sanger said.

Federated, which also owns Bloomingdale’s, had said under its purchasing agreement with Hecht’s parent company, May Department Stores Co., that it would not cut jobs before March 1.

Employees will be released gradually after that date. The company is still determining how many employees will be kept on and in what capacity.

Washington-area Macy’s stores will be operated from the company’s division in New York.

The job cuts are the first Federated has announced since it completed its purchase of May last month. The $11.9 billion purchase creates a retail powerhouse of more than 1,000 stores and $30 billion in annual sales.

The elimination of the Hecht’s name on Washington-area storefronts is the latest in a series of Washington retailers to close their doors, following Woodward & Lothrop, Garfinckel’s and Hechinger’s. That leaves Hecht’s employees, specifically merchandise buyers, with few local job opportunities.

“Merchandisers are most likely going to have to find new avenues of employment, relocate or just have to get retrained and retooled in another job set. The jobs they have don’t exist in this market for the most part,” Mr. Millman said.

Mr. Millman said Federated likely made the announcement six months in advance to give employees time to find new positions to avoid paying severance packages.

“It’s going to hurt the local economy. That’s 1,000 fairly well-paid retail merchandising people,” he said.

Federated also plans to sell its David’s Bridal stores and convert Marshall Field’s stores into Macy’s stores next year.

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