Department stores and specialty boutiques have been struggling for more than a year with a difficult economy, price deflation, a growing mass market and an increasingly picky consumer. The result was an ongoing debate throughout 2002 on what needs to be done to energize the concept.

Companies like Federated, Robinsons-May, Target and Wal-Mart have all taken major steps to alter traditional store formats in order to boost business. Federated announced plans to test its "stores of the future" concept, which will feature fitting-room complexes with seating areas for family members and friends, replete with monitors and even computer jacks for online use. Other technologies include larger signage, so that directories can be dispensed with; new junior concepts with the young men’s area featuring video games; snacks; a phone booth and cyber cafe, and simplified pricing with markdowns calculated clearly for consumers.

Robinsons-May is in the midst of testing its own smaller-store concept, which has been dubbed a "lifestyle store." The approach, which was engineered in part to spike sagging sales, features reduced store formats, a greater emphasis on casual styles, additional lifestyle-driven assortments, more fashion for juniors and contemporary shoppers and trendier displays.

Target is banking a fair share of its future growth on food, morphing its upper-end discount prices, hip marketing strategies and brands to encompass groceries in its larger SuperTarget stores. Meanwhile, its rival Wal-Mart is experimenting with everything from convenience stores to banks to extend its reach.

But perhaps the man with the answer for the future of the department store is Vittorio Radice, chief executive of Selfridges PLC in the U.K.

In November, Radice electrified the audience of vendors and retailers at the WWD/DNR CEO Summit in New York with his view of the department store as "a place," rather than a store, "filled with brands and experiences that inspire and excite our customers. Places where the noise is louder, the colors are brighter and where there is always the new and unexpected. Places that innovate and excite."

He compared the modern department store to ancient bazaars in places like Isfahan, where clothes were sold beside housewares beside food. Selfridges doesn’t worry about developing brands — it leaves that up to the brands themselves. Instead, it focuses on constructing the most dynamic setting imaginable to show off the products — which can range from Apple computers and mountain bikes to lipsticks and designer apparel.In 2003, Radice and his team will be perfecting this art of seduction. The Italian-born retail guru will unveil his most ambitious project next September when he opens a Selfridges in Birmingham. The 250,000-square-foot store will resemble a space station with a wavy exterior made from 15,000 aluminum disks. It’s been compared to what the eye of a fly would look like under a magnifying glass.

"We think it’s going to be a wonderful, exciting building that will create a sense of place. It’s novel, provocative and controversial, but undoubtedly it’s a ‘place,’" he said.

Not surprisingly, Selfridges gave architects Future Systems relative freedom. "We basically gave them free reign to create something new that would distinguish us, have a design integrity, and not look dated," said Peter Williams, Selfridges financial director who works closely with Radice.

The four trading floors have each been designed by a different architect. "With a 250,000-square-foot space, things can get very boring, so we knew we didn’t want a formula or the standard shop fit. From the food to the fashion, everything is going to be interesting," said Williams in a telephone interview.

As for the merchandising, he added that the brand mix would be in tune with local customers, many of whom work in offices. "And it will be more contemporary than classic."

As with the other three Selfridges stores, brands — from Topshop to Louis Vuitton, from Ted Baker to Cozmo Jenks — will rule.

"If Topshop is out there making T-shirts, then who are we to compete with them by coming out with our own private label brands?" said Williams. "Who are we to be originating product, to be making private label when the brands do such a good job themselves? It’s not worth it. We have a wide variety of brands that are reasonably priced, so it makes sense to put them in the spotlight."

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