WWD.com/retail-news/retail-features/dillard-s-maps-mexico-strategy-1161732/
government-trade
government-trade

Dillard’s Maps Mexico Strategy

MONTERREY, Mexico -- After courting them at its stores in the border states of Texas, New Mexico and Arizona, Dillard Department Stores has decided it's time to meet Mexican consumers head on. The company plans to open six stores in this country in...

MONTERREY, Mexico — After courting them at its stores in the border states of Texas, New Mexico and Arizona, Dillard Department Stores has decided it’s time to meet Mexican consumers head on. The company plans to open six stores in this country in the next two years.

“It’s a huge step to move outside the U.S.,” said William G. Haviland, president of Dillard’s Mexico division, in a telephone interview from his Dallas office, elaborating on plans that were hinted at last fall.

At that time, William Dillard Sr., company chairman, was quoted briefly about planned expansion into Mexico, but gave no locations or timetable. His statement was part of a report put together by the National Association of Manufacturers to lobby Congress for the North American Free Trade Agreement.

Dillard’s first Mexican store, slated to open here in October 1995, will be just three hours from Laredo, Tex., site of one of Dillard’s busiest border stores. In Monterrey, the retailer will join J.C. Penney and Sears de MÄxico as anchors of an expanded Plaza Fiesta San Agustin mall, which is in the posh neighborhood of San Pedro Garza GarcÆa.

In the months following the Monterrey opening, Dillard’s plans to launch a Guadalajara store in the new Centro Comercial Hemisferia — where other anchors will be Penney’s, Palacio de Hierrio and Suburbia — and open units at two of four sites planned for Mexico City, Haviland said.

One of its first two Mexico City stores will be in the 46-story World Trade Center, which, when renovated, is slated to be the hub of trade shows and international offices. The building’s first three floors will be devoted to retail, with Penney’s joining Dillard’s as an anchor.

Dillard’s second Mexico City site will be in the Metropol mall, under construction on a 53.5-acre tract about a mile from the long-established Plaza Satelite mall. Penney’s will also join Dillard’s as an anchor there, in addition to the Mexican high-end specialty store Palacio de Hierro.

The remaining two stores in the capital will open in 1996 or 1997. They will be in new malls — one called MetroDome, to be built in the southwest part of the city, and the second, called Metro Star, to be built in the western section of the city.

Dillard’s Mexican stores will be as large as 250,000 square feet and follow the company’s U.S. design, with marble floors in cosmetics, marble aisles throughout the store, recessed ceiling lighting and color-coordinated wall treatments unique to each department.

No volume projections for the stores have been announced, but if they match the Little Rock, Ark.-based company’s corporate-wide average of $147 a square foot in 1993, the largest units should garner annual sales of $36.8 million each. In the NAM report, chairman Dillard said he expected volume in Mexico to increase at a faster pace than in the firm’s U.S. stores.

While plans for Dillard’s Mexican inventory are still being developed, Haviland said the chain will largely reflect its U.S. stores by carrying a selection of merchandise emphasizing many of the brand-name labels already carried by the chain. These include Liz Claiborne, Carole Little, Ellen Tracy, Ralph Lauren, Valerie Stevens Petites, Donna Karan, Jones New York and JH Collectibles.

“What would change is the size scales and color scales and relative importance of some of the lines,” Haviland said. For example, petites and junior sizes — considered hard to find in Mexican department stores, despite the relatively short stature of many Mexican women — will be widely featured at Dillard’s.

Haviland said in Mexico it will continue its pricing policy against continual sales on marked-up merchandise.

“One of the principles of Dillard’s is value-pricing every single day,” Haviland said. This policy, he noted, includes “period reductions” to move certain items out during the season and big clearance sales at the end of the season.