ATLANTA — The clutter is out and lifestyle merchandising is in. Bloomingdale’s has a grip on its future, and it’s apparent in this city, where the chain stormed into the market with two openings last Saturday.
Bloomingdale’s took over former Macy’s units in the Lenox Square and Perimeter malls earlier this year, gutted them, and rebuilt everything except the escalators.
“The only similarity is that we’re occupying the same real estate,’’ said Michael Gould, chairman and chief executive of Bloomingdale’s.
“These stores are open, there’s not a thing in the aisles, no key item tables, there’s 70 percent less signing, no poster signs, no hanging signs, and the departments are very clearly segmented by lifestyle,” Gould added. “Bridge separates from better, and better separates from Y.E.S. contemporary. Each area has its own music, its own videos, its own graphics and its own feel. They are three very distinct rooms.”
“We’ve tried to take our brand strategy to a whole new dimension.”
Sources said the 281,000-square-foot, four-level Lenox Square unit is expected to hit $50 million to $55 million in first-year sales, while Perimeter, with 234,000 square feet, is projected at about $45 million. The two additions bring Bloomingdale’s to 31 units, and almost certainly will push the chain beyond $2 billion in volume next year. In 2002, Bloomingdale’s volume was $1.95 billion, including the Bloomingdale’s By Mail division. Bloomingdale’s operating profits have reportedly been around 8 percent of sales in recent years.
Touring the Lenox and Perimeter units, Gould discussed what he called “the repositioning” of Bloomingdale’s. He said it entails “upscaling” the chain, focusing on less widely distributed lines, particularly in contemporary and bridge categories, and keeping those price levels consistent across ready-to-wear, accessories, cosmetics, men’s and home.
He also said Bloomingdale’s is considering new selling formats, though he’s not ready to announce any rollouts.Bloomingdale’s first apparel-only specialty store is scheduled to open in SoHo in February. If it succeeds, there could be spinoffs.
Since becoming Bloomingdale’s chairman in 1991, Gould has presided over the opening of 16 Bloomingdale’s stores, more than doubling the store count and raising the profit rate. But he’s also taken criticism for playing to too many demographics and price points, with the merchandising and pricing formulas straddling traditional department stores like Macy’s, Lord & Taylor and Parisian, and higher-ticket stores such as Saks Fifth Avenue. In the process, some retail experts have said that Bloomingdale’s lost its edge and blurred its identity.Now Gould says Bloomingdale’s is on a different path, seeking to reclaim its status, and play entirely in the same chic league as Saks, Nordstrom and even Neiman Marcus to some extent. “We are not interested in widely distributed brands,” Gould stated.
In the Atlanta stores, there is a noticeable emphasis on such apparel brands as Marc Jacobs, Juicy Couture, St. John Sport, Miss Sixty, D&G, Seven, John Varvatos, Ted Baker and Canali, and in cosmetics, Stila, Bliss Labs and Guerlain.
However, the shift does not necessarily come at the expense of big-volume, less-exclusive brands like Ralph Lauren, which accounts for over 9 percent of Bloomingdale’s sell-throughs. “Our goal is to differentiate with limited distributed merchandise,” Gould said. “We will have some that’s not, like Ralph Lauren, Estée Lauder, and Waterford. These are vital businesses, but we see geometric growth in limited distributed resources.” Top-priced designer collections, such as Chanel or Armani, are reserved for half dozen other Bloomingdale’s stores, including the 59th Street flagship, but excluding Atlanta.
The home business is a vital differentiator. Bloomingdale’s is the only upscale department store selling home, and with a substantial gift business. Lalique, Baccarat, Christofle, Armani Casa, Edgar Berebi and Kosta Boda are some key resources. Neiman’s and Saks dabble in home and gift products, but have been increasing their offerings, whileBloomingdale’s has been racing ahead by opening freestanding home stores. Three opened in the past year — in Las Vegas, in the former Medinah Temple in Chicago, and in Oakbrook, Ill.
Also in the past year, Bloomingdale’s installed a team of 15 regional merchandise managers to act as liaisons between its 31 stores and the merchants and become more tuned to what customers want in each region. “What’s hot? We get what’s hot,” Gould said. “But we’ve been asking ourselves, as part of our brand strategy, are we really a customer-based organization?” Bloomingdale’s has regions for the West Coast and Midwest; the Northeast, and a third for Atlanta, Florida, Washington and Philadelphia. The 59th Street flagship is considered its own region. “We have a tough enough time understanding how to maximize White Plains, let alone Aventura in Florida, or Atlanta,” Gould said.In Atlanta, however, Bloomingdale’s repositioning is quite evident. From department to department, there’s a consistent taste level, and not much hassle in the shopping experience. “There’s less on the floor making it easier for the customer to see, but there’s more stock in the building, relative to the sales plan than a normal store would have,” Gould said. “There’s a great breadth of inventory, yet the stores are very spacious, the aisles are wider [12 feet versus the more typical 10 feet] and there’s less that fights the customer’s eye.”
“We’ve put all of our efforts into showing the merchandise,” added Jack Hruska, senior vice president of store design and visual merchandising, who was also on the tour. “Aisles that are two feet wider make all the difference in your perception of how easy it is to get through the store.”
Hruska also said that entrances have been widened, and that the Lenox store has 568 mannequins and forms, compared to other branch units that generally display about 350. Moreover, mannequins are theatrically situated on lit rectangular platforms.
In bridge, marked by realistic mannequins with hair and accessories, a crisp black trim and black tiles, there’s Dana Buchman, Eileen Fisher, Ellen Tracy, DKNY, Lilly Pulitzer, Max Mara, Anne Klein, Lafayette 148, Elie Tahari and St. John Sport.
Sutton better sportswear, marked by a tan and beige decor, includes Jones New York, Alfani, Sigrid Olsen, Karen Kane, Lauren, Nine West, Kenneth Cole and City DKNY. On the contemporary floor, mixing items from different labels to create unique outfits, is highlighted. The floor features Marc Jacobs, Theory, D&G, Sharagano, Laundry, Max Studio, Miss Sixty, Juicy Couture, Aqua, Joie, Diesel, Guess and Seven.
Home areas at Lenox are architecturally framed, so there are separate, wide entranceways for such categories as table linens, picture frames and silver, creating individual shop environments. At Perimeter, the floor is divided into four big open quadrants, for broader vistas.
Many in the industry consider Atlanta to be over-stored, even though Federated Department Stores last January decided to close seven Macy’s stores in the market, and Lord & Taylor is pulling out entirely from the South and Southwest, closing 32 stores.“I don’t think Atlanta is over-stored,” Gould contended. “Our focus was always to come to these two spots. We always felt Atlanta was a great opportunity, but we just didn’t have the locations. If we can be successful with these two stores, there will be other opportunities,” in Atlanta. Developers continue to consider building additional malls, such as in the affluent Northpoint community, or it’s possible Bloomingdale’s takes over real estate vacated by other retailers, such as Lord & Taylor.
The next Bloomingdale’s opening will be its apparel-only unit in SoHo. Scheduled to open in February, the store will be weighted to contemporary offerings and reflect the look of the contemporary areas in the Atlanta stores. After SoHo, there are no planned openings until 2006, when Bloomingdale’s biggest branch store is scheduled to open in San Francisco.
Asked about the potential to expand Bloomingdale’s further, Gould replied, “There are other opportunities and great markets for Bloomingdale’s. There’s St. Louis, Pittsburgh, Arizona, Dallas, Houston,” where Bloomingdale’s does not operate at all.
“I don’t think there are 20 more 230,000-square-foot stores or 110,000-square-foot home store concepts, like those in the Medinah Temple or Oakbrook. But there are other ways that Bloomingdale’s can expand. We have started to think about different things. SoHo is an apparel concept. There are opportunities and great markets for Bloomingdale’s.”
He discounted a “resort” store format, like Saks has in a few locations.“I don’t see it. There are other formats we are looking at,” he said. “We will continue to brainstorm to build the brand, whether it’s through Bloomingdale’s by Mail, the wedding registries, dot.com, or our new magazine ‘B,’” which debuts later this month. “What is most encouraging is comp-store growth,” Gould said. Without being overly specific, Gould said fall business is running high single digits ahead, with apparel comps up 17 percent last month. Some categories had double-digit gains.
There’s been some brainstorming about creating a format specializied in selling contemporary merchandise, which is among Bloomingdale’s fastest growing categories. “When we looked at the contemporary business a long time ago, it wasn’t looking [as good] as it is now,” Hruska said.Barneys New York has a jump on that business. It’s opened Co-Op stores for contemporary fashion in Miami, SoHo and Chelsea, N.Y., and plans one in Chicago, as well as having Co-Op floors inside its larger specialty stores. Bloomingdale’s, however, with the financial wherewithal of its parent corporation, Federated, would be able to roll out a contemporary chain much faster than Barneys.
Asked if Bloomingdale’s might do that, Gould replied, “I don’t know. We could certainly do a lot of volume. Beyond that, economically, I don’t know.”
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