News of Federated Department Stores' plan to overhaul hundreds of its regional store chains has a number of Answer Desk readers -- including Kathi in California -- wondering: Hey, is my local department store chain going to be closed? Meanwhile, Mike in Massachusetts is trying to decipher the mysteries of the financial calendar.
Is the Robinson-May department store chain closing?
-- Kathi F., Hacienda Heights, CA
Not exactly. But, like in millions of other shoppers in hundreds of other department stores in malls from Maine to California, you’re no longer going to be shopping at the store your parents and grandparents shopped at. Within a year or so, you’re going to be shopping at Macy’s.
Robinson-May is one of ten regional store chains owned by May Department Stores, which is being take over by retail giant Federated Department Stores. The folks at Federated, who own Macy’s, decided that it made more sense to run all these regional chain under the Macy’s brand. (In March, Federated retired some of its other regional brand names, including Burdines in Florida, Rich's in Atlanta and Lazarus in Ohio.)
The passing of these once powerful brand names is the last gasp of an era in American consumerism that has long faded into history, when regional retail entrepreneurs competed for shopping dollars with stores that reflected their own personalities.
In the case of Robinson-May, that chapter began in 1883, when J.W. Robinson opened a dry goods store at the corner of Spring and Temple Streets in Los Angeles, just south of the current site of Dodger Stadium. Over 100 years later, the chain was bought out by the company started by David May in 1877 in Leadville, Colo., a mining town then in the midst of a silver boom.
Department store owners like Robinson and May were the shopping mall moguls of their time -- pioneering the idea of selling everything under one roof. They also invented much of what we now take for granted at the local Galleria, from rest rooms to restaurants, transforming consumerism with innovations like installment credit and mass market advertising. The concept of “off-price” sales, for example, dates to 1908, when Edward A. Filene opened the Bargain Basement to move unsold merchandise from his father’s his flagship Boston store. The idea –- featuring frenzied shoppers grabbing at clothes heaped in wooden bins -– became wildly popular.
But the fate of free-standing department store chains was sealed decades ago when the suburbanization of America brought the next logical step in retailing -- the shopping mall. Instead of every retail category under one roof, we now have every retailer under one roof. Now, shopping malls themselves are under fire from Big Box discounters and “category killers” -– mall-sized stores offering shoppers a range of choice and depth of inventory once available only in a warehouse.
And the warehouse itself has gone away: Replaced by global, computer-tracked “supply chain management” that keeps shelves permanently stocked with coast-to-coast consistency, at a price that no regional retailer ever had the clout to imagine. All of which is backed by national advertising campaigns to keep the customers coming, a concept that dates back to the department store’s heyday. In the end, it was R.H. Macy’s idea of sponsoring an annual parade every Thanksgiving Day that gave his brand national recognition -– saving it today from the fate of dozens of other regional names.
So when the merger of Federated and May is complete next year, another ten regional department store names will go away -– but the stores will remain. Well, not all of them.
The problem is that Federated already has Macy’s stores in dozens of malls where one of these old regional brand names survives; if the company converted these stores, they’d end up with two Macy’s in some of the same malls. So of the nearly 400 regional stores that are being overhauled, 330 stores will turn into Macy’s, and 68 stores will go away.
The regional chains involved are: Famous-Barr (Illinois, Indiana, Kentucky and Missouri); Filene's (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont); Foley's (Colorado, Louisiana, New Mexico, Oklahoma and Texas); Hecht's (Maryland, North Carolina, Pennsylvania, Tennessee, Virginia and the District of Columbia); The Jones Store (Kansas and Missouri); Kaufmann's (New York, Ohio, Pennsylvania and West Virginia); L.S. Ayres (Indiana); Meier & Frank (Oregon, Utah and Washington); Robinsons-May (Arizona, California and Nevada); and Strawbridge's (Delaware, New Jersey and Pennsylvania.) The company says Marshall Field's may be added to the list. But the Lord & Taylor name will be spared from retirement for now.
For a list of specific locations that will be closed, . (Scroll down to the bottom of the page.)
What are the four business quarters?
-- Mike K., Medford Mass.
Businesses divide the year into three-month quarters to tally earnings, hand out dividends, set sales targets, pay taxes, etc. For companies that use "calendar" quarters, these periods correspond to the calendar year: the first quarter is January through March, the second quarter is April through June, etc.
But some businesses keep their books according to a calendar of their own choosing, known as a “fiscal year,” pegged to the year in which it ends. A fiscal year that starts on July 1, 2005, for example, and runs until the following June 30, 2006, is referred to as Fiscal Year 2006. The first fiscal quarter, would begin July 1, covering the same period as the third calendar quarter. (Still with us?)
There are lots of reasons a company might want to depart form the calendar year when it keeps the books. Sometimes it wants to make its books conform to seasonal cycles. A retailer with a big Christmas business may want to wait until the end of January to tote up all of its sales receipts, which may take a few weeks to account for. Companies with seasonal inventories may want to close the books at the end of the cycle, when inventories are low, to make the annual widget counting easier. And you may be able to get your outside accounting firm to cut you a break if your fiscal year closes in, say, May when the accounting business hits a relatively slow spot on the calendar after a marathon of 12-hour days preparing tax returns.
Once you get started with a fiscal year, though, you have to continue to use the same calendar. Unless, or course, you’re the U.S. government. Until 1976, the federal fiscal year ran from July 1 to June 30. (According to some experts, government fiscal years were originally pegged to July 1 because of the critical role agriculture played in the economy. Until it was clear how well that year’s crop was coming along, it was difficult to plan ahead.)
In 1976, the U.S. government pushed back the close of its fiscal year to October 1, in part to allow extra time for all the political arm twisting between Congress and the White House. But what do to with the “missing quarter” between the end of the old fiscal year and the start of the new one?
In its wisdom, Congress created a “Transition Quarter” – an imaginary, three-month budgetary time capsule which survives to this day as an asterisk in historical federal budget data. This three-month period has been assigned to a kind of accounting limbo attached to no calendar year. Think of it as a kind of permanent budgetary landfill.
It’s not the first time the federal budget process has been overhauled – and it’s likely not the last. Though each effort seems aimed at simplifying the process, few taxpayers understand it. The Senate Budget committee took a stab at trying to explain it all back in 1998.