Federated Department Stores made a decision in 2005 to reposition and consolidate 15 of its regional department store chains under just one national brand—Macy’s. This decision was in response to the decline in sales and profits that had hit the traditional department store industry, which was in a maturing stage and moving towards a downward trend for some time. Just three years later, in 2008, U.S. economy was hit with a recession that threatened the livelihood of many successful retail giants. While Macy’s did experience a significant drop in revenue in 2008 with a net loss of $4,803 million, compared to other department stores such as Mervyn’s that went bankrupt when the recession hit, Macy’s managed to stay in the game. Macy’s ability to not become obsolete was in part due to the consolidation and repositioning tactics that provided the company an avenue in creating a national brand and reducing the unit cost of advertising and promotional budgets considerably due to having one central hub for all of the company’s administrative functions and bulk purchasing.

The success of the consolidation strategy is attributed to several factors. For instance, Macy’s brand already had nationwide recognition as “America’s department store” through aggressive national advertising activities, Fourth of July Celebrations and Thanksgiving Day Parade. In addition, when Federated had consolidated its regionally established department stores, these stores had a well-established customer base, were regionally well known, and were in prime locations close to business districts or large shopping centers, which meant that Macy’s did not have to put any efforts into developing business for those stores but rather maintain and increase business with them.

Moreover, both Federated and Macy’s had solid leadership teams with strong retail and department store experiences. In fact,