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Advantages and disadvantages of private labels - Essay Example

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A private label may be defined as a label that is unique to a specific retailer. According to Weitz's definition, "Private-label brands, also called store brands, are products developed by a retailer and available for sale only from that retailer (2004)." …
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Advantages and disadvantages of private labels
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Advantages and disadvantages of private labels

A private label may be defined as a label that is unique to a specific retailer. According to Weitz's definition, "Private-label brands, also called store brands, are products developed by a retailer and available for sale only from that retailer (2004)." There are many categories of private labels such as, store brands, store sub-brands, umbrella branding, individual brands and exclusive brands.In order to fully discuss private labels, an original company, Macy's, has been used as an example in this essay. I would like to propose several ideas related to private labels that can help improve Macy's profitability.Macy's was founded by Mr. Rowland Hussey Macy in 1851 and established on Broadway in New York City. In 1896 the store was acquired by Mr. Isidor Strauss and underwent a large expansion during the 1920's and 30's http://en.wikipedia.org/wiki/Macy's).Today, it is perhaps as well known for its annual Thanksgiving Day Parade, as its chain of large American department stores. Its flagship store is located in New York City, and currently holds the record for largest department store building.R.H. Macy & Co. merged with Federated Department Stores on 19th December, 1994. Federated merged its Abraham & Straus/Jordan Marsh division with "Macy's East". Federated acquired Woodward & Lothrop/John Wannamaker in 1995. In 1996 Federated purchased and dissolved Broadway Stores and incorporated it into Macy's West. The year 2001 saw the acquisition of the Liberty House chain which had departments and stores in Hawaii and Guam. It was converted into Macy's West.
Bon-Macy's (Pacific Northwest) and Burdines-Macy's (Florida) were soon named as Macy's Northwest and Macy's Florida respectively. And Macy's Central Division included the Memphis and Atlanta Macy's became a part of Macy's central division.
In 2005, Macy's acquired May Department stores and retained its brand name to be sold at the Macy's store. Thus, May became a private brand for Macy's. This was an important merger for Macy's since Famous-Barr, Filene's, Foley's, Hecht's, The Jones Store, Kaufmann's, L.S. Ayres, Meier & Frank, Robinsons-May, and Strawbridge's were all included in this acquisition.
Later the same year Macy's announced that Marshall Field's would be acquired by Macy's and would become the company's North Division. Federated Department Stores has thus successfully eliminated much of its competition by buying them out and converting them to the Macy's nameplate. By 9th September 2006, Macy's will have approximately 850 stores in United States(http://en.wikipedia.org/wiki/Macy's) .
The CEO and Chairman of the store is Terry J. Lundgren and the CFO is Karen M. Hoguet. The vice president of Corporate Communications and External Affairs is James A. Sluzewski (http://www.hoover.com).
Macy's has seven divisions, the names of which are provided below;
Macy's East
Macy's Florida
Macy's Midwest
Macy's North
Macy's Northwest
Macy's South
Macy's West
The top competitors for Macy's are Dillards, Inc (DDS), J.C. Penny Corporation and Saks Incorporated (SKS). The company has a number of subsidiaries and affiliates; namely After Hours Formalwear, Bloomingdale's, Inc., David's Bridal, Inc., and the various regional divisions of Macy's. The company had 232,000 employees in the year 2006 and had a growth rate of 43.30% and (http://biz.yahoo.com/ic/12/12493.html). The annual revenue of the store is 2.5 billion U.S. dollars (http://www.fashioncareerexpo.com/show_co_profile_and_jobs.cfmemployer_id=87&show_id=11).
Historically, private labels were inexpensive copies of original designer clothes, often a season or two behind runway fashion. In addition, most of the private labels had a homely feeling to them. However, this is not the case anymore. Trends have drastically changed in the past few years. Whereas private labels were once sold at the back section of departmental stores, ... Read More
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