A New Macy's Greets Christmas

The "fortress"on 34th Street catches up

The 1977 Christmas buying season started officially last week, with millions of shoppers surging through department-store aisles on the Friday after Thanksgiving. In New York City, the ritual began as it has for the past 50 years, with the balloons, floats and marching bands of the Macy's Thanksgiving Day Parade. Without Dino the Dinosaur (the 20-ft.-tall balloon was retired after 13 years and sent back to maker Goodyear), the parade moved, as always, down Central Park West, ending at Macy's flagship Herald Square store on 34th Street.

Inside the fortress-like structure, however, everything was different. In a $10 million renovation that is still going on, the "world's largest store"* is trying to shake its dowdy image and lure the fashion-and style-conscious shopper of the 1970s. Gone are the ground-floor budget counters where shoppers elbowed for hats, scarves and socks. Gone also are the unimaginative displays of cut-rate drugs and the dull racks of styleless garments. In their places are gleaming glass cases of jewelry and perfume, flanked by gold-crowned marble columns and overhung by glittering chandeliers. A plush green carpet, 12 ft. wide and 318 ft. long, runs along the first floor.

The face-lifting was long overdue. Once Macy's was on every out-of-towner's must-see list (along with the Statue of Liberty and the Empire State Building), but it slipped badly in the early 1970s. It was easily overtaken by the glitter and sharp merchandising of trendy Bloomingdale's; Korvettes, Abraham & Straus and Alexander's, which cater to the traditional Macy's budget-type customer, pulled ahead with jazzy promotions. Macy's sales limped along and Wall Street analysts believe the store actually lost money in some years. It did not share in the growth of parent R.H. Macy & Co.'s 74 other stores around the U.S., which for the year ended last July 30 earned $53 million on sales of $1.7 billion. Worse still, the New York store was in a deteriorating part of the city: only two blocks away, hookers line West 32nd Street trying to lure customers into sleazy hotels.

To spruce up its wilting New York centerpiece, the company turned not to outsiders, as other retailers have done when seeking fresh ideas, but to a seasoned, home-grown executive: Edward Finkelstein, 52, president of Macy's of California. Finkelstein quickly sized up the New York store as lacking "verve, excitement and ambience." Its most important good feature, though, was its oldest one: size. Finkelstein seized upon Macy's caverns as he began the rebuilding job. Says he: "It's a beautiful building. It's a good rectangle for fooling around in modernizing."

He figured that he would need the space for displays to get Macy's out of the budget business and upgrade its image as a family store. Says Finkelstein: "What New York needed was a department store that would talk to families in the middle and upper-middle income groups. There are many stores for the lower-middle income group--Korvettes, Alexander's--and Bloomingdale's is for the upper-middle and upper-upper." At the same time, he wanted to attract younger customers who are more conscious of their own needs, less of their children's desires.

Finkelstein started his campaign in Macy's basement, one of the first bargain basements in U.S. retailing. He abolished it and created the Cellar, actually a tiled "street" lined with spacious shops for gourmet food, cutlery, stationery and kitchenware and an art gallery. At one end is a reasonably accurate replica of P.J. Clarke's, the Irish pub in midtown Manhattan that stands just as it was built in the 1890s. Demonstrations run continually: a potter handcrafts vases in the pottery shop. On upper floors came other changes: a massive children's store on six, divided into separate shops for each age group; an "arcade" on the ground floor with numerous boutiques, one of them a candy shop that will sell 27 kinds of jelly beans.

Analysts praise Finkelstein and crew for slipping Macy's into the modern mainstream of U.S. retailing, and for brightening an important slice of a weary urban America. Financially, the effort is paying off. Business this year--boosted by Sunday openings--could reach nearly $200 million, up more than 10% from last year. Finkelstein anticipates a record Christmas. That speaks loudly to other retailers again looking at once-laggard Macy's Herald Square. It has something to show off these days. -

* Under one roof. It has 1 million sq. ft. of selling space.

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