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The Death of Marshall Fields and the Dissolution of the Sense of Place

ArchitectureChicago Plus posting from September 21, 2005 





Finally, the deed is done. Yesterday, Federated Department Stores announced that all of the stores of Marshall Field's, a Chicago institution for over a century and, with Wanamaker's, one of the two creators of the concept of the department store in America, would be converted to Macy stores in 2006.

From their inception, department stores were like a museum, a riverfront, a memorial, or a stadium - something that defined the unique character of a city. Now they're just roadkill in Wal-Mart America. A look at Field's recent history helps explain just how this happened.

Analysts have been declaring the death of the department store for decades, and they've been right. To survive into today's retailing environment, a department store had to be incredibly brilliant. Field's was merely unlucky. Its fate was sealed the day the chain was sold to BATUS, a tobacco company, in 1982. BATUS proved as inept with retail as it was successful with tobacco. Gimbel's, another BATUS acquisition that was once Macy's most potent rival, was run into the ground and put out of its misery in 1986. BATUS dumped Fields four years later, selling it to Dayton-Hudson just as that company begin to morph into discount powerhouse Target, for whom its lingering residue of department stores soon became a troublesome and neglected distraction. While Target poured over $100,000,000 into rehabbing the State Street flagship, the creativity Fields so desperately needed - visually arresting, youth-oriented marketing, and the development of exclusive brands around designers like Michael Graves and Issac Mizrahi, went to building the Target brand, instead. The writing was on the wall when, in a 2001 trial run of Federated's move yesterday, Dayton's and Hudson's, cherished institutions in their respective cities of Minneapolis and Detroit were rebranded with the Field's name. After cashing in its equity by selling off the State Street flagship - Field's is now a renter - Target sold the chain to May Department Stores, which, in turn, was sold to Federated less than a year later.

Back in 2003, the New Yorker's Adam Gopnik, in a prescient analysis of death and life of department stores, quoted Harvard professor Richard Tedlow, who dates the decline of departments stores to the the development of the mall after World War II. Originally, the departments stores were what drew people in, the stores in between were merely the filler. Over time, however, that filler grew into the Gap and the Limited and dozens of other national chains just like them, becoming the new destination stores to which traditional departments increasingly played a catch-up, "me-too" role. At the same time, the flagship stores of the chains entered a decline as middle-class whites, fleeing to the suburbs, abandoned the downtown districts in which the stores were located.

In talking with Marvin Traub, the man who transformed Bloomingdale's from an also-ran to a fashion powerhouse, Gopnik touches on a fundamental truth that eludes both executives like Lundgren and the retailing "consultants" who make a comfortable living telling them what they want to hear. Traub describes himself, not as a retailer, but as a "merchant" which in his definition is someone who knows how to add value to the shopping experience. "All the great department stores," he tells Gopnik, "had great merchants at their head: Stanley Marcus at Neiman Marcus, Adam Gimbel at Saks Fifth Avenue. Each one had a vision and an understanding of the connection between the department store and the shopper, and that connection is emotional and even theatrical."

Terry J. Lundgren, Federated CEO and the man behind dumping Field's name, is not a merchant. He's a real estate and supply chain executive. All the experts tend to say that's where it's really at. But what propels a Wal-Mart or a Target into the stratosphere - relentless cost-cutting, ruthless standardization, and thousand of stores that are essentially identical whether in Lubbock or New York - is death to a department store. If a department store isn't special, it's got nothing. The big chains began to fail in direct proportion to how soon being special lost out to supply chain economics. It's hard to see how 300 Macy's clones across the country will appear special to anyone outside of the current Macy's management.

If Lundgren is a mediocre merchant, he's adept, as bureaucrats very often are, as a politician. He made a point of making a pilgrimage to the 5th Floor of City Hall to brief Mayor Richard M. Daley on the renaming before announcing it to the press, thereby avoiding the fate of a former Field's management, which had announced shifting production of the store's iconic Frango mints out of Chicago without first tipping off the mayor, incurring a scathing rebuke.

If the goal of Lundgren's was to preempt mayoral criticism, he was successful. Daley's laconic response basically boiled down to "Who Cares? Things Change," which is more than a little ironic since just across the street from Fields is Block 37, (which, despite over 15 years of intense efforts including a long, abortive courtship of Harrod's of London - and Macy's, itself - has stubbornly remained a vacant lot), the marching orders to the current developer The Mills Corporation is to create a mall filled with retailers unique to Chicago. What difference will that make now that its massive neighboring anchor is just the local Macy's outlet? The wondrous interiors will no doubt remain, but the typical tourist may never discover them: "Hell, I've got Macy's at home," he or she will say. "Why waste my time at the one here? I'm going to Millennium Park!"

In its current manic form, market economics is relentlessly hostile to any authentic sense of "place." Uniqueness is just a way station to an inevitable ubiquity. If someone in Denver or Mobile comes up with a wildly successful new concept for a store or restaurant, it's almost always just a matter of time until they cash in for the big payoff - franchising, a national rollout - where what made the concept special is homogenized and standardized in order to make it replicable to everywhere U.S.A. On the Fast Company website, there's a 2002 article by management guru Jim Collins that summarizes this dynamic in a single phrase: "Built to Flip."

"No need to build a company," writes Collins, "much less one with enduring value. Today, it's enough to pull together a good story, to implement the rough draft of an idea, and -- presto! -- instant wealth. No need to bother with the time-honored method of most self-made millionaires: to create substantial value by working diligently over an extended period. In the built-to-flip world, the notion of investing persistent effort in order to build a great company seems, well, quaint, unnecessary -- even stupid."

Collins sees "Built to Flip" as pandemic to Silicon Valley, but in its own weird way, it also describes the fate of department stores. Marshall Field's was flipped from BATUS, to Dayton-Hudson/Target, to May. Each cashed out, and passed it on. Lundgren's Macy is merely the latest flipee. When Lundgren's cost-cutting strategy fails to arrest the downward trajectory of department stores, as it inevitably will, he'll be gone, and all or most of Macy's will be flipped again, quite possibly not to survive as a retailer, but to die as a real estate play, just as the merger K Mart's Edward Lambert recently engineered with Sears is probably more about acquiring marketable property than reviving either store.

Someone like Marshall Field or John Wanamaker - or even a Bill Gates or Steve Jobs - all became fabulously rich as a side effect of devoting their lives to creating something really new and unique. The approach of a number-cruncher like Lundgren is much more parasitical. It's less about creating something great than squeezing out value from an existing asset without ever really doing anything to replenish it. Today, Federated is a Department Store chain, but you get the sense that if a McKinsey consultant told Lundgren there was more profit to be had rolling drunks in the alley, the company's focus might change overnight.

In Chicago, one thing needs to be done quickly. Amazing as it may seem, the Field's State Street Store, built in stages and designed by Daniel Burnham, is not an official landmark, although the designation process, for which Federated has indicated support, is well under way. It's essential that the process be expedited, in order to protect the building's stunning first floor, atriums and great Tiffany dome for the time, probably not too far off, when Federated radically reduces the space it devotes to retail, and begins lobbying for a a massive retrofit of interior spaces for alternative uses. (A recurring question at Landmark Commission meetings has been whether Field's identity could be saved by giving landmark protection to the large metal plaques bearing that name on the building's exterior, but the body seems disinclined to take that approach.)

Beyond that, for at least the time being, it's time to recognize that the private sector is no longer interested in creating unique local presence. Generally, the best we can hope for is projects where national chains restore and retrofit classic buildings, like Home Depot in Manhattan, setting up shop in an 1870's building that once housed Stern's Department Store. Increasingly, it's up to local governments and semi-public institutions like museums to create new landmarks like Millennium Park or the Milwaukee Art Museum. Most often the private sector is happy to be the hermit crab setting up its home in a borrowed shell.

In the end, if the alternative is to make things available more cheaply and efficiently, unique local character may seem an anachronistic luxury, but its loss is an assault on America's future. Creativity comes, not out of uniformity and constricted choice, but out of the range of possibility that only variety can provide.

By developing mass production and insisting on paying his employees a superior wage, Henry Ford helped invent modern America. When he achieved dominance, he stopped evolving - he was a little bit too proud in saying that you could get a Ford in any color you wanted, as long as it was black - and his company pitched into a deep decline. When AT&T was the only phone company, there was less than a handful of models to choose from, and you couldn't even own your own phone; you leased it from AT&T. This is the model that inspires Bill Gates as he transforms from innovator to monopolist, relentlessly pitching Microsoft software as something you can never own. Think Vista Windows 2006 in perpetuity, sold on a subscription model. Fortunately, the Open Source movement is keeping the spirit of innovation alive, but you get the idea.

My friend Wendy, who hails from New Jersey, doesn't understand what all the fuss is about. To her, Macy's has always been a superior store - she's only known Field's in its long diminished state, something she shares with all Chicagoans not yet middle-aged. She has a point. If Macy's fails on State Street, it's doubtful it will be due to a boycott by those of us who do remember how great it was, but because the very idea of the department store is one whose time is receding into history. “Everything under one roof” has devolved from a people's palace to a bare-bones warehouse, and in the process, we're becoming as much of a widget as the stock stacked on the endless, identical aisles of open pallets.

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