ST. LOUIS — The news about women’s apparel was not bright as two top department store firms — Dillard Department Stores and May Department Stores Co. — held their annual meetings last week.
On Friday, David C. Farrell, chairman and chief executive officer of May Co., said following the stockholders parley at the Cervantes Convention Center here that consumers have “pulled back” on their spending, putting a crimp in women’s apparel sales in the last 30 days.
“Sportswear is not as strong as we would like to see it,” Farrell said.
Overall, May Co.’s department store sales since mid-April have experienced a downturn, Farrell said, adding, “Sales are not quite as buoyant as they were in the first quarter.” He cited consumer concerns about federal income tax increases and rising interest rates.
All the news was not bad. Dresses, according to Farrell, are selling better, and suits in misses and petite sizes are “the stronger parts of the business.” In addition, new wrinkle-resistant products are off to a fast start in men’s wear, although in women’s they aren’t as much of a factor, Farrell said.
As reported, May Co. sales for the first quarter were up 11.4 percent, 7.7 percent on a comparable-store basis. Earnings rose 17.1 percent.
May Co. said its five-year plan through 1998 involves spending $5 billion, with $4 billion earmarked for 110 new department stores, 1,200 Payless ShoeSource stores, 1,000 Payless Kids expansion stores, and 100 department store remodels. This year, the firm will spend $985 million for capital improvements, a record amount for May Co. Fifteen department stores will be opened, 15 expanded and 17 remodeled.
In Little Rock, Ark., on Saturday following Dillard’s annual shareholder session, William Dillard Sr., chairman and ceo, described the women’s apparel business at the firm as “extremely sick.”
“It has to be that consumers don’t like the styles or the prices. Whatever the reason, they’re not buying,” said Dillard, who founded the department store chain in 1938. He further noted that the soft business continues a trend noticeable in 1993, when the women’s category was “not up to expectations.”
Dillard’s is attempting to alleviate the problem by “being careful in what we buy,” and by developing new brands and private label, he said. He said there are no plans to retrench on the firm’s everyday low pricing strategy, which was introduced a couple of years ago in an attempt to eliminate the promotional climate.
The Saturday session, which took place in a conference room at the Union Building here, attracted fewer than a dozen outside shareholders. Dillard quietly recited some financial figures of 1993, called for the results of the balloting, and following the absence of questions or comments from shareholders, adjourned the meeting within seven minutes.
Asked after the meeting about Dillard’s reported interest in acquiring Macy’s units, the chairman said: “It’s out of our control. We are not now negotiating with them.”
He added, however,”We’re interested in at least the southern Macy’s stores.” Dillard disclosed an “aggressive” expansion program” for 1995, which will include the retailer’s entry into Mexico. Three Dillard’s units are scheduled to open in fall 1995, in Mexico City, Guadalajara and Monterrey. (For more on Dillard’s and Mexico, see page 10.) He said an additional 15 stores are slated to be opened next year, three of which will be new turf for Dillard’s — Colorado, Virginia and Indiana. Dillard’s currently has stores in 20 states, primarily in the South and Southwest.
After the meeting, Dillard noted that 10 new stores will open this year at the following locations: Laredo, Ft. Worth, Houston, and Woodland, Texas; Paducah, Ky.; Yuma, Ariz.; Charleston, S.C.; Hattiesburg, Miss.; Clarksville, Tenn., and Pembroke Pines, Fla.