DILLARD’S

Byline: Georgia Lee

ATLANTA — Dillard Department Stores has been praised for its broad selection of brands and private label, and fair pricing. However, when it comes to expansion, analysts say the chain has been sleeping while Federated Department Stores and May Department Stores eat up the competition.
Dillard’s, considered a bottom fisher, has passed up more than a couple of acquisitions, but since 1995 has stepped up store openings. The Little Rock, Ark.-based chain, currently with 249 stores, added 16 in 1996 and 11 in 1995.
The chain has been criticized for not promoting and suffering declining margins lately. Prices are comparable to Rich’s and Macy’s, although Dillard’s doesn’t compete in one-day sale wars. Dillard’s does, however, have end-of-season sales with as much as 75 percent off and will meet other department stores’ prices on some sale items.
Although heavily concentrated in the Southwest, Dillard’s recently has expanded into new territories — Denver, Atlanta and Louisville, Ky. Florida is a key expansion area; nine Dillard’s locations have opened there since 1995, and there are more than 30 stores in the state.
Dillard’s is entering California in 1997 with a 200,000-square-foot unit in the Weberstown Mall in Stockton, and negotiating for a site in the Coddingtown Mall in Santa Rosa, which could open in spring 1998. Other California sites are being pursued. But the expansion seems incremental compared with the competition’s.
Dillard’s held on to the fifth place nationally, largely thanks to consumers in Dallas and Phoenix, where it was voted the favorite store.
According to the WWD survey, consumers list selection, fit, quality and service as primary factors that make Dillard’s desirable to shop. Selection in casual and dressy areas was cited most by women 30 to 50 years old with upper-middle incomes. Brand name and quality were mentioned as most important, particularly among 18-to-39-year-olds in the middle-income range.
Dillard’s opened one Atlanta store last March, in Alpharetta, a high-income suburb north of downtown. It was the chain’s first store in Georgia. “One store in a small trading area is not much of a commitment,” said Neil Thall, president of Neil Thall Associates, an Atlanta retail management search consulting firm. “Dillard’s usually goes into a market with more than one store.”
High stock levels and a large number of better brands, special sizes and well-developed bridge areas are Dillard’s strengths. There is a wide range of sizes in most styles. DKNY, Dana Buchman, Emanuel, Andrea Jovine, Jones New York, Ellen Tracy and Ralph Lauren collections are well represented.
Dillard’s promotes itself as having the widest selection of dresses of any department store in the Southeast.
Analysts describe Dillard’s as a solid, mainstream department store with a broader selection than some competitors. “Dillard’s appeals to an average, middle-class person that likes department store shopping,” said Jan Martinez, president of Ashford Management, an Atlanta-based retail management executive search consulting firm. “They do buy differently, so they offer a different product, and they’re strong on service.”
Sales for 1995 were $5.9 billion, a 7 percent increase over 1994 sales of $5.5 billion. Net income was $167.1 million (after a $78.5 million charge for the impairment of assets) versus $251.8 million in 1994. Net income per share was $1.48 (after impairment charges of 69 cents per share) versus $2.23 last year.

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