Creating the Department Store of the Future

The headline of the lead story in The Wall Street Journal said it all: "Retailer Federated is in Discussions to Buy Rival May." That story, leaked to the Journal by an unknown source, set off more than a month of rumor, speculation and intense negotiations as Federated Department Stores and May maneuvered for position in what would become one of the largest M&A stories of the year. As Federated prepared to address the public relations challenge, it turned to Ketchum for support.

The communications challenge was twofold: to persuade key stakeholders, particularly investors, that the acquisition was in their best interests and to position the acquisition as a true milestone that would vault Federated into the top ranks of the retail industry and American business.

The Federated and Ketchum strategy centered on briefing key influencers about the business case behind the deal and on announcing the news in a high-impact way, underscoring Federated’s position as “America’s Department Store.” Ketchum studied 52 analyst reports to learn what issues mattered to investors, developed lists of the key opinion leaders and created a plan for a broad announcement of the acquisition. That announcement included a high-profile press event in New York City, which positioned Federated CEO Terry Lundgren as the public face of the company, an investor conference call, and one-on-one interviews with key journalists and opinion makers.

The heavily attended news conference, combined with the conference call and CEO interviews, made the acquisition the number-one business story in America that day. Federated’s stock price was up 8% after the announcement and continued to climb afterward. Many major articles hailed Federated for “re-inventing” the American department store.