The regional brands had had their own dilution already. May muddled the image of many former ADS brands by bringing in more mid-market merchandise. Ditto Marshall Field's. They were somewhat successful with the Robinson-May combo where it was obvious that you were getting a melding. Federated had been consolidating well before this and some of their more upscale chains like Lazarus had had to assimilate more downscale locations.
An overall problem that predates consolidation is that upper middle brow stores and some of the old high end regional stores like Halle's often had trouble translating the coherence of their downtown stores to the suburbs--you wound up with locations that lacked the both the elegance and the higher end merchandise that distinguished the chains---there were really only a few locations in a big metro area to support the kind of merchandise that established their reputations. At the same time, the lower middle brow chains, like most of the May stores used the suburbs to shed some of their promotional cheapness and there was more merchandise overlap with higher end chains than they had downtown. And then you had chains like Dillard which gutted the service and distinctive merchandise of the upper middle brow chains they bought.
Macy's gets blamed for things that mostly happened well before the May-Federated merger.