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|Federated Just Might Buy May Department Stores|
By Pauline Grant - January 26, 2005
We’ve all been to “The Mall”—whether it was the Glendale Galleria, the Brea Mall or The Oaks in Thousand Oaks—and it’s all the same. There’s a Macy’s on one end and a Robinson’s-May on the other. At least it’s been that way since the demise of the Broadway, Bullock’s and Buffum’s department stores of a decade or more ago. Now, since the late 90s and the first five years of our current millenium, it’s been these “big two”, and I even have a credit card for each.
When I go to any Mall, I start with either Macy’s or Robinson’s-May—which ever one happens to be the closest to where I’ve parked my car—and when I’m done shopping in the one I naturally hit the other. I like having a credit card for each, because then I can spread out my spending on clothes and perfumes and keep the charges off my major credit cards. This helps me stay under my credit limits without cramping my style and taste in clothes shopping.
But, now my world of two charge cards and my two luxury department stores at each end of each Mall could come to an end. It looks like the end of an era will come soon if The Federated, the parent company of Macy’s, buys May Department Stores Co., the owner of Robinson’s-May. Reportedly, Federated Department Stores Inc. is in talks to buy May Department Stores Co., and if this happens it could severely squeeze the wallets of California shopping center owners, some apparel manufacturers and many media outlets.
Not only that, but within the California claims world, one of their claims departments would most likely close. That could be anybody’s guess. Since the buyer would be The Federated, most likely Federated’s claims department in Pasadena at 401 So. Lake Avenue would remain open, and May Department Stores Co. claims department in Redondo Beach would close. This is pure speculation, but anyone could speculate that the buyer would most likely keep its current claims department, expand it by merging the other's existing claims into it, and shut down the other claims department.
Both The Federated and May Department Stores are self-insured, self-administered. Presently, The Federated handles all workers’ compensation and disability claims inside their administrative offices on site near the Macy’s store at 401 So. Lake Avenue. They just moved to this new location last year, after having been located for a decade or more in the less pristine industrial district of Los Angeles. Their claims manager for about the last five years has been Rob Crawford, and recently Tom Der has been promoted from claims examiner to supervisor.
May Department Stores claims department is in the Mall in Redondo Beach. Ken Klee has been the Director of this department long term, and Margarita Gomez has lately been the claims manager. So, if May is purchased by Federated, it wouldn’t be hard to guess that this Redondo Beach location claims department might be surrendered.
Cincinnati-based Federated has opened preliminary talks with executives at St. Louis-based May, the Wall Street Journal reported one week ago, citing unnamed sources. The newspaper said there was no guarantee a deal would result. Neither Federated nor May executives would comment on the report.
If it were to come to fruition, a Federated acquisition of May would create the nation’s second-largest department-store chain with nearly 1,000 locations. Annual revenue would reach about $30 billion.
Only the combination of Kmart Holding Corp. and Sears, Roebuck & Co. would be bigger.