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Kathryn Bufano on Belk’s Southern Accent

The president and chief merchandising officer drives home the retailer's heritage of Southern style.

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Belk doesn’t do anywhere near the volume of Macy’s, Kohl’s, J.C. Penney or Dillard’s — and that’s just fine, according to Belk’s president and chief merchandising officer, Kathryn Bufano.

“Within our 16-state footprint, we are the dominant store,” stated Bufano, explaining why bigger isn’t always better.

She’s politely discussing the competition, and maintains that Belk’s assortments more than measure up and actually cater better to the Southern clientele and lifestyle, though she, as well as other Belk officials, acknowledge that Dillard’s has made progress bolstering its performance and presentation. And they don’t deny Macy’s clout in the vendor market, either.


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Still, no one at the $3.8 billion Belk is quivering over the My Macy’s field organization, for years touted by Macy’s chairman Terry Lundgren as a key competitive strategy that tailors assortments to local preferences and even has a “Southern strategy” within the overall game plan, aimed at wooing over customers loyal to Southern-grown retailers.

When asked about the threat of My Macy’s, Bufano replied, “Our breadth of assortment is very dominant. Macy’s has outstanding merchants, but they are out of New York. We live the Southern life. We convert our assortments into spring earlier, starting in November. We have a very feminine aesthetic. Women in the South wear party dresses to football games. Up north, women wear sweats to the games. Of course, Macy’s is in our stores all of time and we know that. But we look at market share very aggressively. It’s totally how you merchandise and how you edit.”

Bufano breaks out the statistics on Belk’s flagship in the SouthPark Mall in Charlotte, N.C., to underscore the point. At 330,000 square feet, it’s Belk’s largest store in terms of size. It’s also Belk’s second-largest in terms of revenues. “In SouthPark we have an $80 million store. That’s two-and-a-half times what Macy’s does” in that location, Bufano said. “Nordstrom does $50 million in SouthPark.”

Even more significant, Belk typically outsells all of its key competitors — Penney’s, Kohl’s, Macy’s and Dillard’s — in most malls, Bufano said. “For the third year in a row, we were number one in comparable-store increases against our four key competitors — chainwide.”

Of the four, Penney’s could be considered Belk’s primary competitor since Belk has approximately 210 locations where there is a Penney’s within 10 miles, and there are about 150 malls where the two retailers sit together, according to Bufano.

She has a unique perspective, having worked for Macy’s for several years before joining Belk in January 2008 as president of merchandising and marketing. Just before, she was ceo of the Vanity Shops junior specialty chain based in Fargo, N.D. She began her retail career in 1977 and has held key executive-level and general merchandising posts with Sears, Dress Barn, Macy’s and Lord & Taylor.

She’s known as a results-driven, bread-and-butter merchant with strong experience in women’s and private labels. At Sears, Bufano was behind several initiatives, including introducing the Covington private sportswear brand; pumping up Canyon River Blues, another proprietary brand; launching big-and-tall shops with national brands and Covington; discontinuing scores of labels in apparel and soft home that meant little to consumers, and making other changes on the selling floor.

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At Belk she has come into her own as a leader. It’s a bit like being a bigger fish in a smaller pond that’s growing. She’s the first person outside the Belk family to hold the president’s title at the chain and is highly visible in the organization, in the markets and in the media. In August 2010 she was promoted to president and chief merchandising officer, succeeding H.W. McKay Belk, who decided to extend a sabbatical to further pursue his Christian ministry-related service. McKay remains on the board as vice chairman and is the brother of Tim and John Belk, the chief executive and chief operating officers, respectively.

Since Bufano joined Belk, alliances with key labels such as Polo Ralph Lauren, Calvin Klein and Michael Kors have been strengthened; the shoe business has grown to more than 10 percent of total sales, from 7 or 8 or percent, and footwear occupies about 9.5 percent of the total sales square footage, from 6 percent previously.

Cosmetics, long a core strength at Belk, has also been strengthened with expanded presentations of Bobbi Brown, MAC and Lancôme. There are many locations where Belk is the only store selling Chanel, Lancôme, Clinique and Estée Lauder.

Designer handbags have been pumped up with shops for Michael Kors and Coach. Other labels that have been on the rise at Belk include Brahmin handbags and Polo men’s wear. Currently, Belk’s strongest categories are shoes, handbags, home and kids.

Originally belk.com only included home. But three years ago, when it was under $20 million in sales, it was expanded to include all categories sold at the store. Last year the site generated $135 million in sales.

Private brands, which reports to Bufano as well, has also grown to represent just under 30 percent of total revenues, with a good, better, best pricing scheme. This month the program was elevated with Belk’s first true designer contemporary label, Cynthia Cynthia Rowley.

 

“Even though Cynthia is not from the South, we like her style aesthetic. Color, print and florals are very dominant,” said Bufano. “There’s a very feminine twist, and dresses are a big piece of her collection.”

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The line was launched in 149 Belk doors, representing close to half the chain, and includes apparel, handbags, jewelry, scarves, accessories and small leather goods, priced $80 to $200. The collection will be displayed in 500- to 700-square-foot shops generally, though some could be as large as 2,000 square feet.

Made Cam Newton, the exclusive men’s collection of suits, sport coats and sportswear endorsed by Cam Newton, the stylish Carolina Panthers quarterback, also made its debut this month. Made Cam Newton is being carried in 133 stores and on belk.com and by fall 2013 will add accessories and shoes.

 

“It really is a collection with a young vibe in terms of mixing and matching,” Bufano said. Made Cam Newton and Cynthia Cynthia Rowley could be catalysts for future designer and celebrity collaborations.

In addition, Bufano launched Belk’s Southern Designer Showcase contest for designers with roots in or ties to the South. Fifteen winners now have their designs in 44 stores that have a focus on contemporary fashion and are flagged with signs introducing them. The showcase is part of the department store chain’s 125th anniversary celebration, and it could continue in years ahead. The designers’ creations are also sold on belk.com and featured on Belk’s Facebook page, as well as in advertising related to the anniversary.

There were 175 submissions from established and up-and-coming designers as well as some fashion students. They all provided samples, photos of their merchandise and write-ups as to why their looks are right for Belk, and they participated in interviews with Belk’s merchandising executives who determined the winners.

“It was hard to narrow it down to 15,” Bufano said. “It was open to anyone who had design roots in the South, came out of a Southern design school. Some won Charleston Fashion Week. Some had small businesses.”

While Bufano is credited with elevating Belk’s merchandise, the process began before she joined the company, with the acquisition of Parisian in 2006 from Saks Inc. Those stores were converted to Belk. “That was a big catalyst,” Bufano observed.

After that jump-start, “We really defined a more updated modern assortment,” to a large extent led by such labels as Ralph Lauren, Belk’s largest designer brand, as well as Vince Camuto, Michael Kors, Sam Edelman, Frye, Eileen Fisher, Coach and Uggs. DVF, Tracy Reese and Plenty, Rachel Roy, Stuart Weitzman and Marc by Marc Jacobs are important labels on the contemporary side.

There is also a group Bufano characterized as specialty niche brands, like Lilly Pulitzer and Vineyard Vines, which are currently sold in about 20 to 30 locations and go a long way toward elevating Belk’s image and building volume. Key brands on the more moderate side of the matrix include Columbia, Izod, Chaps, Dunner and Ruby Road in women’s.

“There is a more elevated fashion approach to everything,” Bufano said. “We’ve tried to make a big, big difference, not only with having a Southern style in terms of color, delivery, fabrics. It’s really with our whole rebranding effort” revolving around the marketing mantra “Modern. Southern. Style.” launched more than two years ago. “It’s in everything we do. It has really permeated throughout the organization and as the personality we have in our stores. We take it very seriously with how we differentiate ourselves in the marketplace.”

Bufano also credited improved technology for demand forecasting, size optimization, automatic replenishment on basics like denim, underwear and bras, and new allocation tools for fueling growth.

 

“Our business over the last five years, especially the last three years, has been very strong,” Bufano said. “Vendors like growth. Key vendors have benefited from our growth and profitability.

“Because of the population growth in the South, many vendors are underpenetrated in distribution in this part of the country. In many locations we have no competitors. People are moving to the South. From 2000 to 2010, the nation’s population rose 23.5 million, and 13.5 million of those landed in states where Belk operates. It’s our time.”

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