By  on June 5, 2008

LONDON — Whether they're operating in the economic doldrums of the U.S. or the rapidly growing economies of Russia, China, Thailand and Malaysia, retailers gathered at the Global Department Store Conference here Thursday and Friday agreed quality of service and engaging with customers are two powerful weapons with which to combat the threat of both growing competition and cautious consumers.

Paul Kelly, chief executive of London's Selfridges, one of the conference's organizers, said in his opening remarks that "2008 and 2009 are going to be tough years, we've known that for some time. When the wind changes, you've got to change tack."

Kelly added that since the Weston family acquired the store in 2003, they have transformed Selfridges' accessories areas, opened up the store's windows to "show people what our soul is all about" and devoted 3,500 square feet to its Ultralounge, an area that doesn't carry products for sale. Instead, the store holds exhibitions and events in the basement space. "We want to capture customer affection and loyalty," said Kelly. "If you can do a good job in the tough times, you'll do a great job in the good times."

Terry Lundgren, chairman, president and ceo of Macy's, echoed this policy of improving the store's offering in difficult times. "We have to think through who we want to be when the customer comes back and begins shopping again," said Lundgren. "It's time to embrace newness, innovativeness and ideas, we have to support the brand and what it stands for." Lundgren also accepted the summit's award for department store of the year, which was awarded to Bloomingdale's, at a dinner last Thursday night,

Similarly, Stephen I. Sadove, chairman and ceo of Saks Fifth Avenue, said that in the weak economic climate, the company is focusing on categories such as footwear, handbags and jewelry, along with "reinventing" the struggling bridge category. "There's a consumer slowdown and [the consumer] is responsive only to promotion, this is the environment we're having to live through," said Sadove, who cited the launch of the store's shoe floor 10022-SHOE in September as an example of "targeted capital improvement" to increase the productivity of Saks' current stores. Sadove said that after the department's success in New York, the company would expand to "five or six more stores."

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