CALIFORNIA PREMIERE: BLOOMINGDALE’S STARS WITH FOUR NEW STORES
Byline: Michael Marlow
LOS ANGELES — Bloomingdale’s is ready for its close-up.
Over the next 10 days, the quintessential New York retailer will blitz West Coast shoppers and Hollywood elite alike with four new stores in three of the state’s hottest and most affluent retail markets.
It’s the chain’s California debut and its most ambitious expansion drive ever.
The official openings are set for Friday in Palo Alto in the Stanford Shopping Center, and Saturday in West Los Angeles in the Century City Shopping Center. On Thursday, Nov. 16, there are two more grand openings; in Newport Beach in Fashion Island and in the San Fernando Valley in Fashion Square at Sherman Oaks.
The day before each grand opening, each branch will open its doors for credit card customers so they can beat the rush.
A fifth Bloomingdale’s will open next spring in Beverly Center in Los Angeles, and there’s been ongoing speculation about Bloomingdale’s opening a store in downtown San Francisco.
While store executives declined to comment on sales, sources said each store is expected to hit an annual volume of $50 million to $70 million.
At the outset, the Bloomingdale’s stores will almost surely be packed. For several months, the chain has been sponsoring charity fund-raisers and signing up credit customers, building anticipation for the openings.
The real challenge is whether shoppers keep returning to the new stores. Bloomingdale’s will scratch and claw for every customer and market share point it can wrest from such tough rivals May Department Stores, Nordstrom, Neiman Marcus, and Saks Fifth Avenue — even Macy’s West, which like Bloomingdale’s, is a division of Federated Department Stores.
“I think the competition will be tougher there than on the East Coast,” said Michael Gould, Bloomingdale’s chairman and chief executive officer. “On one hand, the opportunity has never been greater; on the other hand, no one is giving us a free lunch.”
For many years, there’s been talk inside the ranks of Federated about rolling Bloomingdale’s out coast-to-coast, but the serious talk didn’t start until after Federated emerged from bankruptcy in February 1992 and started eyeing acquisitions. Bloomingdale’s also had to clean up its branch act, after some earlier expansion moves misfired. Units in Dallas and Stamford, Conn., closed in 1990, and there’s been mixed success in its Chicago and Bloomington, Minn., stores.
Under the direction of Gould, costs have been cut and consolidations have been made but, according to Gould, not at the expense of service. Most importantly, Gould has been building strong customer relationships, holding more special shopping nights for preferred customers and bringing more of the flash of the 59th Street flagship to the branches. His mission is also to make sure that the branches are appropriately stocked for their markets and have a better flow of merchandise so that the company’s profitability is not so heavily dependent on the 59th Street flagship.
However, Bloomingdale’s California invasion was clearly hastened by Federated’s acquisition of Broadway Stores last year, giving Bloomingdale’s an easier vehicle for opening stores.
The timing is good. After last year’s slight economic growth, 1996 may be the real comeback year for Los Angeles. With specialty and department stores boasting sales increases, “economic recovery is under way,” said Jack Kyser, chief economist with the Economic Development Corp. of Los Angeles County. “Since early 1995, we are adding some 140,000 jobs, many of which are high skill and high paying.”
Kyser predicted that in 1996, area retailers will generally be close to 5 percent ahead.
Amid the optimism, Bloomingdale’s hopes to introduce a different sense of style to California.
“We’re not going to be another Macy’s,” Gould said. “We’re going to be very fashion-conscious, and whether it’s [the Broadway musical] ‘Rent’ or ‘Evita,’ we’ll be there first. Customers and resources will know that no store responds faster to fashion than Bloomingdale’s.”
Given Gould’s familiarity with the market — he ran Robinson’s and Giorgio Beverly Hills, both based in L.A., during the Eighties and early Nineties, count on Bloomingdale’s creating something different.
In fact, the New York powerhouse is creating bright, open stores with lots of architectural detail. Projected images on the exterior of the Century City store display fashion, people and art in a constantly changing montage. In Newport Beach, local artists have designed a dozen 25-by-30-foot banners that drape the building.
Interiors have a loft feel with white walls, occasional splashes of color and desert tones, as a walking tour of the Century City store revealed. As in the New York flagship, cosmetics makes a first-floor statement, but there is greater emphasis on interactive displays — from self-serve cosmetics counters to showcases that open from the customer side.
Bloomingdale’s is brighter than many of its southern California competitors. Walls are angled, drawing the shopper through the store.
“We want to be the neighborhood store, an everyday store, not just a special-occasion store,” Gould said. “If you want to buy a gift, you go to Bloomingdale’s. It’s really a store where you can buy everything — lipstick to hosiery. No one’s going to have better towels, and we won’t be undersold.”
Competitors are not taking Bloomingdale’s entry lying down. Even before the store’s doors open, other retailers have been firming up their customer base, shining up stores and boosting the number of in-store events and designer appearances.
The Beverly Hills Neiman Marcus branch — a $100 million powerhouse — has operated on a state of alert for several years now. In 1994, Barneys New York opened several blocks down Wilshire Boulevard, threatening to sap designer customers from all upscale competitors.
Last fall, Saks Fifth Avenue raised the stakes by opening a towering men’s store in the shadow of Neiman Marcus in the old I. Magnin flagship, and Saks has disclosed its intentions to build more stores in the state.
“I don’t underestimate the Bloomingdale’s name,” said John Martens, general manager of Neiman’s Beverly Hills store. “It is a household word.”
One battle has been for designer exclusives. Neiman’s, Saks, Barneys, Nordstrom, Macy’s and the Rodeo Drive specialty shops are all within several miles of Bloomingdale’s in Century City, and are protective of their best-selling lines.
“The other retailers aren’t welcoming us,” Gould said. “They’ve done a lot to make our lives difficult.”
Gould declined to provide the names of designers Bloomingdale’s wanted but couldn’t get.
Kyser predicted Bloomingdale’s will have only a moderate impact on the market. “I have seen some of Bloomie’s branches, and [they’re] ho-hum. They’re going to have to position themselves very quickly in the market, but there’s going to be quick counterpunches from Neiman’s, Saks, Barneys and Nordstrom.”
“The competition out there is ferocious,” said Kurt Barnard, publisher of Barnard’s Retail Marketing Report. “The other retailers out there won’t lie down and let Bloomingdale’s take their market share away.”
Fred Hayman, the Rodeo Drive retailer and the Academy Awards’ fashion consultant, said Bloomingdale’s greatest challenge will be providing a shopping experience that is unique.
“I hope they carry a mix of merchandise that is different from the others,” Hayman said. “I never know what store I’m in. Their job is to stand out from the rest.” Gould said the store will be a hybrid of New York and California. In the fine-jewelry area, photos of Grand Central Station and the Empire State Building hang on one wall, while vivid images of the California desert hang on the opposite wall. While the merchandise mix is similar to New York’s, Gould said, there is an added emphasis on California resources, including Mossimo in the men’s store.
Fink predicted Bloomingdale’s impact on the market will not be as severe as some expect. “Look at Barneys,” he said. “They were supposed to change the landscape. But is Barneys a great success or not? It’s hard to tell.”
Bloomingdale’s is off to a different start by emphasizing community involvement. The calendar of special events in the stores is aggressive during the next few weeks.
It kicks off with a black-tie event Wednesday evening at the Palo Alto store with Liza Minelli scheduled to perform there, as part of a benefit for Stanford University Medical Center.
The next night, there’s a gala at the Century City store, which has become the hot ticket of the season. It’s a benefit for the UCLA School of Medicine Aesculapians, the charity group with the funny name and the strong Hollywood following. Comedian Jerry Seinfeld and pop stars Phil Collins and John Mellencamp are scheduled to entertain 2,000 guests.
The event is intended to introduce the store to high-flying Hollywood, a population that can make or break an upscale retailer. But even with “Sussussudio” reverberating off the glistening Century City skyscrapers, the real music arrives at the store Saturday morning, when cash registers begin whistling Gould’s favorite tune.