Federated Takes Stern's Measures

Federated Department Stores (Cincinnati), which announced last fall that it would close the Stern's Department Store in New York's Herald's Square, has now announced that it will be closing the entire 24-store Paramus, N.J.-based chain. Thus ends a 134-year-old retailing tradition.

The retailer said 17 of the 24 stores would be converted to Macy's. The move will cost Federated up to $150 million in store conversions, employee relocation and retraining and other expenses.

“We believe the best approach for Federated in the Northeast is to concentrate on our two strongest department store brands,” said ceo James Zimmerman, referring to Macy's and Bloomingdale's.

“Stern's appeal was mostly to older people,” said retail journalist Kurt Barnard. “It was performing okay, but nothing to write home about.” “Stern's was competing with discounters such as Wal-Mart and Target,” agreed Malachy Kavanagh of the International Council of Shopping Centers. “It couldn't cut it.”

Stern's (founded in 1867 in New York as Stern Brothers), became part of Federated Department Stores in 1992 when Allied Stores Corp. merged with Federated. Two years later, Federated acquired R.H. Macy & Co. and created the Macy's East Division, which included Stern's and Abraham & Straus (which was shuttered shortly thereafter).