By  on July 14, 2010

The retail landscape is being remodeled as economic volatility compels stores to alter traditional formats.

Large chains are breaking out the most profitable or promising segments of their businesses, such as accessories, sportswear and denim, into smaller stand-alone footprints. Other retailers are trying to appeal to a younger demographic with new labels and edgier store concepts.

BCBG launched BCBGeneration to target a younger crowd and A|X Armani Exchange opened a new concept store in Los Angeles that doubles as an event space and features an art gallery.

Guess is revamping its accessories-only concept, and plans to open more than 40 of those doors globally over the next year. It started with a store in Aventura, Fla., in May, and a second last month in Rome. The company’s Guess denim stores also have a new look and are branded separately from other company lines, such as G by Guess.

“These days, everybody is specializing in one thing or another,” said Paul Marciano, vice chairman and chief executive officer of Guess Inc. “To have across-the-board success in all categories is very hard. Very few nondiscount companies can do it. The emporium-style shopping experience doesn’t work anymore if you want to maintain any kind of brand value or identity.

“Customers are well educated, have clear ideas about what they want and they come to shop for those items,” he said. “It’s hard to mix, in the same space, lines with different identities.…We believe the smaller footprint is easier to manage and more profitable.”

Even luxury doors are getting in on the retail revamps.

Catherine Malandrino’s Los Angeles concept boutique, Malandrino Maison, evokes a lounge atmosphere, including a Parisian-style cafe, artwork and books for sale.

“In this environment, with clientele feeling so much pressure, you have to make it a warm, comfortable environment they will want to come visit and relax,” Malandrino said when her Los Angeles store opened last year. “If you can bring them in, then the retail sales will come. But it’s getting people into a boutique now that’s the challenge first.”

Vera Wang, who scaled back plans for her Los Angeles boutique and jettisoned a store for her halted Lavender line, said her approach to retail has changed in the last two years.

“People want a more intimate experience now,” she said. “You can’t just cram things down someone’s throat — and you wouldn’t want to — especially now that they think they can get a better deal at department stores. You have to give them a reason to come in, a special experience. When the majors went 90 percent off, it changed things so much, it was unbelievable.”

That approach contrasts with the large formats of fast-fashion valueretailers, including Forever 21, H&M and Zara, which embrace biggerstores housing a wide range of merchandise.

“For us, the timingcouldn’t be better. The consumer is looking for value and the largerstore concept allows a broader array of merchandise across allcategories,” said Larry Meyer, executive vice president and chieffinancial officer of Forever 21. “There’s been a lot more opportunityfor us to get larger spaces, and in primary markets where we’ve beenlooking to grow our presence.”

Analysts said the trend towardsmaller, average store sizes will have staying power because those unitsare regarded as more profitable and easier to manage. With inventory atmany stores slashed by as much as 30 to 40 percent compared with threeyears ago, there is diminished need for storage space.

“Theconsumer is in control, and the approach of retailers to theirbrick-and-mortar stores now is a testament to the divergence in themarket — it’s a high-low approach,” said Alan J. Barocas, anAtlanta-based retail consultant and former International Council ofShopping Centers trustee.

“Some people are going the opposite,like Forever 21 and other value-oriented big boxes, but outside ofdiscounters, generally people are taking less space for less money andlooking to edit,” he said. “There are smaller door counts, too, asretailers are trying to use stores as a test ground, but at lessoverhead cost than in the past.”

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