Tom Cole, Federated Dept. Stores

When Tom Cole began his career with Federated Department Stores in 1972, the Cincinnati-based retailer was ringing up annual sales of just over $1 billion dollars and had nearly 20 divisions.

Today, Federated has more than 400 stores (now under two divisions, Macy's and Bloomingdale's) and annual sales of more than $15.6 billion. Certainly a lot has changed over the years. And more is still ahead as Federated prepares to integrate the 500-plus-store May Department Stores Co.

Its efforts to be a leader in the retail market have earned Federated honors as the 2005 VM+SD/Peter Glen Retailer of the Year (see page 18). The award will be presented at VM+SD's International Retail Design Conference, held September 21-23 at Chicago's Fairmont Hotel, where Cole will share the Federated story. (For more information, visit www.irdconline.com.)

Cole, now Federated vice chairman, has played an active part in that transformation, serving as senior vp, financial services, for the Lazarus division and, for six years, president of Federated Merchandising Group in New York.

In 1994, he was appointed president of Federated Logistics and Operations (FLO), a new division responsible for coordinating merchandise distribution and logistics functions and vendor technology for all Federated divisions. In February 2003, he was elected corporate vice chairman of FLO, which now also includes store design and construction, as well as the Federated Systems Group and the Financial, Administrative and Credit Services (FACS) division.

As the country's largest department store retailer embarks on a new era, Cole says Federated is poised to become America's coast-to-coast department store retailer. “Bloomingdale's and Macy's provide us with two of the best brand names in retailing,” he says.

Federated is preparing to acquire the May Department Store Co. What does this acquisition say about the future of Federated?

We think it says exciting things about this company. Federated will be the nation's largest department store organization with operations in 49 states – every state but Alaska.

Why does size count?

By extending the Macy's and Bloomingdale's brands into virtually every major market from coast to coast, we have the ability to improve the retail landscape as we deliver more value to our customers and shareholders. Federated is a dynamic company and this is a dynamic time to be involved in retailing.

What does this acquisition say about the future of department store retailing?

We believe strongly in the department store concept as we are redefining it in all of our markets. There is a lot of room between the upper-end retailers who compete on exclusivity and the discounters who compete primarily on price. In that vast middle ground, we believe we understand the needs and preferences of the core department store customer and we are meeting her expectations through our emphasis on our four priorities – differentiated assortments, price simplification, an improved shopping experience and enhanced marketing.

Historically, department stores have been known as innovators, introducing shoppers to such things as window displays, escalators, fashion brands. What's a recent example that Federated remains on the forefront?

Our entire Reinvent Strategy is based on innovation, improvements designed to make the shopping experience more attractive and compelling to the customer. And the response we've gotten from our customers – on everything from enhanced dressing rooms and lounge areas to in-store visuals, the convenience of shopping buggies and the introduction of price scanners – has been overwhelmingly positive. That tells us that we are on the right track.

What's a sign that the future looks good for retail?

The American consumer.

In 2004, Federated created the Macy's Home Store division to improve and centralize the home assortments at its department stores and standalone stores, such as this one in Costa Mesa, Calif. Vice chairman Tom Cole will share the Federated story at this year's IRDC.