My Facebook Thoughts

Tuesday, November 13, 2007

More More More

Yesterday I posted my opinions about Macy's being shoved down the throats of Chicago after they took over Marshall Field's. I had good feedback, which is always welcome. My brother, however, raised a point which I feel is the core to many of societies problems.

He said;
"It (Marshall Field's) was underperforming, hence being bought three times.
I agree that every city needs it's identity but money dictates more."

I will key on the word underperforming.

In Economics 101 you learn that in business the goal is to make money. In the corporate world you have to make more money. It doesn't matter how much profit you make as long as you make more than the last time.

I used to work for the number 1 waste hauling company in the world. We were making $15 billion a year. Yet for the greedy money grubbers at the top, they wanted more. Wall Street wanted more. Every stockholder wanted more. They all said the company was underperforming. Well, the only way to make $15 billion look like more money is to lower your expenses. The fastest way to lower your expenses is to layoff workers. I survived one set of layoffs. That kept the money grubbers happy for awhile. But, they still wanted more. Long story short, my company sold themselves. I mean, they merged with a much smaller company, they gave the smaller company all the control, the smaller company laid off some 1300 employees, then they moved the company to Texas. But, guess what? On paper their profits went up. The grubbers were happy.

I would have celebrated my 18th anniversary with them. The people there treated me well. I was the first person with a disability to work for them. I was never physically stronger than I was working there. All the people were great. Yet, we were underperforming.

9 years has past since I, and many others were let go. The company stock price is at $34.90 today. Just a mere $6 more than it was when we were underperforming. I hope the grubbers are happy.

I'm trying to point out that as a society we need to look at more then just the bottom line. Otherwise, we are just an underperforming society. Our profits of hope must not be diminished.


L. Grand said...

Yes, Mark, the Macy's sycophants somehow seem to force their point, without looking at the FACTS. Field's was ALWAYS profitable, whether profits from the previous year were up or down didn't matter; always profitable means always profitable - ALWAYS.

While your brother points out that Field's was sold three times and this is somehow seen as always being a negative, I'd like to offer a different perspective. There was much value to the Marshall Field's name - and the price for the 64-store chain went UP each time. Federated/Macy's paid anywhere from 11 billion to 17 billion (reports have varied as to this figure for some reason) for the entire May Co. stores (400+) and yet Macy's, Inc., which now has 800 or so stores has a market cap of only 12.6 billion dollars by recent analysts' estimates.

In conclusion, "it was bought three times" can look like a tails-up penny to some - "ooh - that's bad - don't pick it up or you'll have bad luck". As for me, a penny spends whether heads up or tails up - it's value has not been diminished no matter which side you look at!

Anonymous said...

Marshall Fields. Macys. What's the difference? They are both overpriced stores.

It cracks me up that there are Chicagoan's who get worked up this. The way I look at it, if you believe a store defines your image then you are a pretty sad sack.

Mark Plocharczyk said...

Businesses are bought and sold all the time to appease the stockholders.

Business that don't profit truly go away or get bailed out by the government.

Scott Ploch said...

Being bought three times was my point. In my line of work, mergers & acquisitions, there are many profitable companies that are sold. MF was profitable but in the business world they were underperforming so other companies buy them with the intent of making more money by figuring out why they enderperform. Macy's messed it up by removing the name.

Mark Plocharczyk said...

"The way I look at it, if you believe a store defines your image then you are a pretty sad sack."

What is wrong with having an identity? Marshall Field's didn't define Chicago, but it was something special. All great cities have things that are special about them. I don't see a problem with that.

Scott Ploch said...

New York-Macys
Boston-Clam chowda
Los Angeles-Rodeo Drive?
Chicago-There really is no store is there?

Mark Plocharczyk said...