The Deal: In February 2005, Federated ­Department Stores, parent of Macy’s, announced a $17 billion takeover bid for May Department Stores and its 11 regional chains, which included Marshall Field’s and Filene’s Basement. For the first time, the United States had a nationwide department store, and C.E.O. Terry Lundgren, who engineered the deal, was hailed as “the new king of retail.” The bulging empire of about 950 stores was expected to revive the struggling 150-year-old Macy’s franchise, which had come to symbolize the industry’s middle-­market squeeze—not exclusive enough to attract high-end shoppers and not cheap enough for bargain hunters.

The Aftermath: Almost immediately, the Federated-May union caused friction. When Federated changed its name and those of almost all its stores to Macy’s, shoppers loyal to brands like Marshall Field’s resented the loss of what they viewed as cherished local institutions. Company executives squabbled, and sales softened. In February 2008, Lundgren consolidated seven regional offices into four and laid off 2,300 employees. By April, the ­Macy’s board had stripped Lundgren and his executive team of their bonuses, and Fitch Ratings had downgraded Macy’s credit rating to a notch above junk. In November, Macy’s reported a third-quarter loss of $44 million after taxes, warned of a weak holiday season, and cut its capital-expenditure budget by close to half. Currently, Macy’s stock is headed toward $5, down from about $30 at the time of the merger.

The Bottom Line: If Macy’s were a balloon in its Thanksgiving Day Parade, it would be the Hindenburg.