Retailing: Shuffling the Lazari

Looking forward to his 83rd birth day next month — and backward on a 65-year career in merchandising — the chairman of the U.S.’s largest depart ment store group announced last week that he was relinquishing his title. Fred Lazarus Jr. turned full command over to Son Ralph, 53, and will keep only the honorary assignment of executive committee chairman of Federated Department Stores Inc. The man succeed ing Ralph as president of the Cincinnati-based organization is J. Paul Sticht, 49, a onetimeCampbell Soup Co. executive who joined Federated in 1960 and has been serving as a vice chairman, along with Maurice Lazarus, an other of Fred’s sons. Sticht will handle operations of the 97-stores while Ralph Lazarus will concern himself with planning and expansion.

In Transition. The changeover is any thing but abrupt. “We have been in transition for about five years,” explains Ralph. As part of the transition, the younger Lazarus began taking on more and more of his father’s responsibilities, logged 150,000 air miles annually, checking on Federated stores from coast to coast. Last year he formally became chief executive. “Ten years ago,” says Ralph, who became president in 1957, “if we disagreed, his decision would pre vail. Now I guess mine would.”

The Lazarus family, which has been in merchandising for four generations and has built Federated from a single store in Columbus to a group with sales of nearly $1.5 billion a year, has been adding non-family experts to its corporate staff as part of the transition.

The most significant addition was Sticht, who worked his way through Grove City (Pa.) College as a steel-mill laborer and campus odd-jobber. Sticht got his management experience at TWA and Campbell’s, where he was head of the international division when the Laz ari—as Cincinnatians call the merchandising family—persuaded him to try his skills at retailing.

Big in the Suburbs. Under the tandem supervision of Fred and Ralph Lazarus, Federated has grown at a breathless pace. The company, which includes Bloomingdale’s and Abraham & Straus in New York, Burdine’s of Miami, Filene’s of Boston, Foley’s of Houston and Goldsmith’s of Memphis, has built so many suburban stores that last year, for the first time, branch sales exceeded those of big downtown stores. In 1964, in its latest acquisition move, Federated took over Bullock’s of Cal ifornia, which includes I. Magnin & Co., a Bullock subsidiary with 20 stores that set styles all over the state—even in sophisticated San Francisco.

Bullock’s will be the last department store addition for a while. As part of the transaction, Federated agreed with the Federal Trade Commission that it would not buy any more such stores for a five-year period. Expansion-minded Ralph Lazarus, therefore, is looking for other opportunities. The company is about to open a string of discount stores under the name “Gold Circle,” has borrowed $20,000,000 to invest in European retailing if an opportunity comes.

A fifth generation of Lazari is preparing to enter the company, but the new chief executive of Federated is bending backward in order to avoid even the slightest hint of nepotism. “All they have is a hunting license,” explains Ralph Lazarus. “They’ll have to do 20% better than anybody else just to stay. We’re not running a family business any longer, but a publicly owned concern which must be managed by professional management.”