WWD.com/retail-news/retail-features/bloomingdale-s-plans-a-string-of-new-units-2b-sales-in-sight-1173288/
government-trade
government-trade

Bloomingdale’s Plans A String Of New Units, $2B Sales In Sight

<?XML:NAMESPACE PREFIX = CS /><CS:BOLD>NEW YORK -- Hard times aren't holding back Bloomingdale's.<BR><BR>In its biggest expansion year ever, Bloomingdale's is opening stores in Bridgewater Commons and Willowbrook Mall in New Jersey in April, and in...

NEW YORK — Hard times aren’t holding back Bloomingdale’s.

In its biggest expansion year ever, Bloomingdale’s is opening stores in Bridgewater Commons and Willowbrook Mall in New Jersey in April, and in Orlando, Las Vegas and Chicago in November. The openings will raise the chain’s national store count to 28, and should enable Bloomingdale’s to break the $2 billion barrier within two years.

Market sources say Bloomingdale’s in 2001 posted about $1.75 billion in sales, with 23 locations.

In 1996, Bloomingdale’s, a division of Federated Department Stores, entered California in four locations within two weeks, the biggest expansion to date. While this year’s expansion will yield five locations, it remains to be seen whether it will add more revenues than the California openings.

In terms of profitability, Bloomingdale’s last year reportedly fell in the middle of the Federated pact, and was hampered by the decline in tourism, the recession and the impact of Sept. 11. Earnings before interest and taxes profits have ranged from a low of 5 percent 10 years ago, to a high of 11 percent in 2000. Federated also operates Burdines, Lazarus/Rich’s, The Bon Marche, Macy’s East, Macy’s West and Fingerhut.

Bloomingdale’s latest expansion tightens the chain’s grip on the New York metro area, its most important market, and advances its fledgling freestanding home store concept. The Vegas and Chicago units will be home stores. Bloomingdale’s only other home stores are in Chestnut Hill, Mass., and Newport, Calif.

In New Jersey, Bloomingdale’s is converting two former Stern’s units. Federated announced its decision to shut down Stern’s in February 2001 and convert most of the units to Macy’s, and two to Bloomingdale’s.

It will be a brutal battle for market share, since New Jersey is among the nation’s most overstored states, overrun by megamalls, outlet centers and discount centers, and the ubiquitous Macy’s and Lord & Taylor. More recently, Nordstrom, Old Navy, Kohl’s, Target and Hennes & Mauritz have infiltrated the state.

Nevertheless, Bloomingdale’s, which currently operates two branches in New Jersey, at Riverside Square in Hackensack, and the Mall at Short Hills, contends it can break through the sea of merchandise sameness. According to market sources, Bloomingdale’s hopes to double in three years its New Jersey volume, which is currently around $160 million.

“With everything we do, we try to differentiate,” said Bloomingdale’s chairman and chief executive officer Michael Gould, in an interview. “In New Jersey, we have been strong in feminine apparel businesses, in particular, bridge and contemporary, and we do extremely well in Short Hills, despite not having a furniture department there. There is a lot of business to be had there. There’s a good Saks, a very good Neiman’s and a Nordstrom. We can carve out for ourselves a business that’s different.”

The Short Hills unit posts about $80 million in volume, making it Bloomingdale’s sixth biggest volume branch. Short Hills, however, is the leading ready-to-wear branch, with steady bridge, contemporary and better businesses. It averages more than $400 in sales per square foot, while Bloomingdale’s overall, including the 59th Street flagship, tops $300, on a selling-square-footage basis. The 59th Street flagship here has 924,000 square feet and does a volume of almost $500 million.

Bloomingdale’s biggest volume branch location is in Chestnut Hill, Mass., where the separate freestanding apparel and home units post $90 million in combined sales.

The new New Jersey stores could siphon some business from the existing New Jersey stores, which could drop several points, Gould said, further complicating the challenging climate for business. “It will be a tough year for us. Customers have to be concerned. I know consumer confidence went up a bit, but there are enormous issues over tourism and the lack thereof — U.S. and international tourism.” At the flagship, tourism accounts for about 30 percent of Bloomingdale’s sales.

The three-level, 273,000-square-foot Bloomingdale’s in Willowbrook Mall, in Wayne, will be a full-line unit, excluding furniture, and is scheduled to open April 11. The two-level, 160,000-square-foot Bridgewater Commons store in Bridgewater, N.J., will sell apparel and accessories, but no home products, and will open two days later. Bloomingdale’s plans to have a separate home store up and operating in the Bridgewater mall by Nov. 2003.

Taking over the Stern’s stores means more space for several departments, including cosmetics, which will have 14,000 square feet in Willowbrook and 12,000 square feet in Bridgewater. The typical Bloomingdale’s branch has around 9,500 square feet for cosmetics. That means broader selections and more one-on-one service, including makeup artistry tables. Willowbrook also will have the largest fine jewelry department of any Bloomingdale’s branch.

Bloomingdale’s will sell some of the big brands that lots of other stores also sell, like Polo Ralph Lauren and Estee Lauder. However, in the bridge and contemporary arenas, Bloomingdale’s says it has the edge and sees major market opportunities. Among the bridge vendors that Bloomingdale’s will play up are Ellen Tracy, Dana Buchman, Anne Klein, Ralph Lauren Sport, which becomes Blue for fall, DKNY, Eileen Fisher, Tahari and the store’s private label brand. On the contemporary side, key vendors include BCBG, Leon Max, Laundry, Theory, Juicy Couture, Diesel and Seven.

“We’re creating prototypes for contemporary and bridge departments,” said Frank Doroff, executive vice president and general merchandise manager for women’s. “They’ll be more defined, instead of free-floating, to make it easier to shop.”

The new look is inspired by the 59th Street flagship’s designer floor, which balances enabling designers to project their own identities, but under the umbrella of a Bloomingdale’s signature look.

“This is our next-generation, in-store design,” said Jack Hruska, senior vice president of store design and visual merchandising. “The last one was in 1993 when we opened in Old Orchard, Ill., which set the tone for stores in the Nineties. These will set the tone for the beginning of the 21st century. Old Orchard was an open, gallery-like box, curvilinear and asymmetrical, with very little distinction between businesses. In New Jersey, the stores are rectilinear. Each family of business has its own architectural framework and environment. Traffic aisles are linear rather than curvilinear. These stores are quite different, and have nothing to do with Stern’s.

“For instance, Y.E.S. [contemporary] is designed with no vendor environments. It’s monochromatic, with lights that change colors to change the look of the area and large back-lit graphics. Sutton [for better sportswear] is monochromatically designed with vendor environments color-matched to the total environment of beige, cream, golden and accent of black. And for bridge, we’ve created an architectural surround, with black marble floor and black lacquer frames with edge lighting, into which we’ll insert the vendor shops.”

For the design of the stores’ interiors, Bloomingdale’s worked with consultants Tucci, Segrete & Rosen.

The women’s businesses in the New Jersey units, according to Doroff, will be evenly divided: one-third bridge, one-third contemporary and one-third better. Designer collections won’t be sold, although St. John, priced just above bridge, will be. Gould sees St. John as a $1 million opportunity at the Bridgewater store, considering the brand is not sold at the mall.

Aside from a home store in Bridgewater Commons, no other openings are planned for next year. “We’re not looking at anything at the moment, but that doesn’t mean there won’t be others,” Gould said. “We are always looking for new opportunities. Obviously, Jersey is a terrific one.”

Bloomingdale’s has long been considering San Francisco, but a location on Market Street has been mired in litigation and environmental concerns revolving around the center that would house a Bloomingdale’s. The company is reportedly eyeing Atlanta and more units in the Chicago area. According to one source, in most cases, Bloomingdale’s is contemplating home units. At one time, Toronto was a consideration, but is not currently.

But while Bloomingdale’s might take a breather after the latest string of openings, it’s always on the lookout for more sites. Asked if there’s a ceiling on the store count, Gould stated: “We don’t think there is one.”