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Belk Adding More Upscale Brands

With the rebranding of its upscale Parisian chain, Belk has gone upmarket and brought in some higher-end men's brands.

ATLANTA — People can stop calling Belk a downmarket retailer.

With the rebranding of its upscale Parisian chain, acquired from Saks Incorporated nearly one year ago, the Charlotte, N.C.–based, family-owned department store retailer has gone upmarket and brought in some higher-end men’s brands that even Parisian didn’t carry. Among the labels new to the mix are Perry Ellis, Hugo Boss, Lacoste, Hickey Freeman and Chip & Pepper.

Belk made the name change on Wednesday, Sept. 12, erasing the Parisian moniker, which has been around since 1877, from the 25 stores it retained following the acquisition and raising the Belk name in its place. Belk acquired 38 Parisian stores last year from Saks Inc. for $285 million and either closed or sold the other 13 units, as reported.

Belk celebrated the name change with grand-opening promotions and events that included trips to Ireland, New York City and other locations. Greg Norman tied in an appearance and autograph-signing at the Phipps Plaza store in Atlanta, where the Greg Norman Collection has an in-store shop.

Other upgrades include the shift of the Parisian stores at Phipps Plaza and at The Summit in Birmingham, Ala., into flagship stores, joining Belk’s two other flagships at SouthPark Mall in Charlotte, N.C., and Crabtree Valley Mall in Raleigh, N.C. Belk has made a concerted effort to prove to doubting Thomases that it can deliver on the upper end, particularly in these two stores. The men’s store at the 170,000-square-foot Phipps Plaza store continues to offer Joseph Abboud, Hickey Freeman, Hugo Boss, Greg Norman and Cole Haan, and has added Lacoste, Nike Golf, Perry Ellis and Chip & Pepper to the mix. The Summit store in Birmingham is adding Hickey Freeman, Hugo Boss and Calvin Klein, while the Riverchase Galleria store, also in Birmingham, is adding Nautica, Nike Golf, Lacoste, Chip & Pepper, Calvin Klein and Hickey Freeman.

Before the Belk acquisition, Parisian was classified as a specialty department store. Robert Talbott, which sells only to better specialty stores, pulled out of the assortment.

Belk added big & tall departments to several stores but not to the Phipps Plaza and The Summit flagship units.

“We’re more than capable of merchandising to a high-end customer,” said Steve Pernotto, executive vice-president of Belk, noting the company’s experience with higher-end assortments in the Charlotte and Raleigh flagship stores. “People should be very pleased.” Belk is also taking its better stores up a notch by adding Perry Ellis, Tommy Bahama, Polo, Lucky Brand Jeans and Brighton furnishings. Its core stores will also have a better representation of brands, but targeted to moderate price points and customer demand in individual markets. “It depends on the location and the customer,” Pernotto said. “We spent a lot of time on this—doing research in the market and talking to customers and to associates.”

Customers won’t find Parisian’s private brands, though. They still belong to Saks Inc.

Belk spent approximately $104 million updating the Parisian stores, which included expanding some units.

The retailer is spending $13.5 million alone on expanding and remodeling The Summit flagship to add a home store, scheduled to open in fall 2008, and to expand assortments in accessories, shoes and women’s apparel. It is spending $6 million on the Riverchase Galleria store in Birmingham for an expansion from 191,000 square feet to 230,000 square feet to add home and to make minor renovations of the men’s and women’s stores and intensify better-merchandise assortments.

Investments in the Atlanta market, where Belk now has 21 stores, include $3.5 million at the North Point Mall store, which was moved to a new and remodeled, 120,000-square-foot location (formerly a Lord & Taylor store).

“The stores had not been updated for a while,” Pernotto said. “The fixtures were old.”

Since the acquisition was completed last October, sales at the Parisian units have exceeded Belk’s expectations. “We’re very pleased,” Pernotto said. Feedback from customers has been good, according to monthly customer satisfaction scores. Belk expects that to drop for a while because of the name change, then go back up. “It went down for 30 days when we changed the name of McRae’s and Proffitt’s [also acquired from Saks Inc.] but it went back up to normal after that,” he said. “We expect that here, too.”

Company-wide, Belk, which has a total of 300 units, reported a 20.2 percent increase in sales to $879.6 million and a comparable-store increase of 2.2 percent in the second quarter ended Aug. 4. Net income fell to $7.5 million from $26.3 million, which Belk partly attributed to the Parisian transition.