SIBLING RIVALRY: MODERATE AND BETTER BATTLE FOR SPACE
Byline: Shirliey Fung
NEW YORK — The moderate and better segments are sisters of sorts — they’re always fighting over who gets the bigger room — or, in this case, bigger floor space.
With some customers retrenching this season because of rising energy costs and other economic pressures, the moderate segment seems to have gained some ground, with a few stores shifting more floor space over to the lower tier.
Overall, however, the tug of war contest seems to end in more of a draw: Many stores have kept the same breakdown for spring between the two mainstream segments as they had last year.
Some industry observers have bemoaned the lack of freshness in the better branded business. Especially with the new economic consternation, moderate offerings are often on par in terms of style, but at better price points.
After a poor spring 2000 showing from some better vendors, Bealls Department Stores has upped its moderate selections, at the expense of better, from last year’s 66 percent to 70 percent this year.
Conrad Szymanski, president of the Bradenton, Fla.-based chain, was blunt about the main reason behind the shift at Bealls: “It was primarily an issue with uninspired merchandise direction [from some of the better vendors].”
He found that moderate resources were able to respond more quickly to fashion trends and were able to deliver on the goods sometimes two to three months more quickly than better vendors.
“Some of the better vendors are big public companies and they take a cautious approach,” he said. “They cannot deliver fashion the way they used to.”
“We went through a cycle for many years where stores were very focused on developing better business with shop concepts. We’re seeing the same kind of thing now beginning to happen in the moderate area,” said Kathy Bradley-Riley, merchandise manager at the Doneger Group buying office. “Management [is reevaluating] floor space and the moderate zone is going to benefit from that.”
As part of a three-pronged strategic plan, Elder-Beerman Stores has shifted more floor space over to the lower tier.
“Our customers want value. That is their number-one priority,” said a spokeswoman. “[Through surveys] our customers are telling us what to put into stores, and in terms of moderate and better, that means we’re devoting more floor space to moderate.”
Scott Manson, vice president and divisional merchandise manager of Gottschalks, said his company had a higher better-zone penetration a year ago.
“We’ve looked at our gross margins and business just wasn’t there, so we did some downsizing in the better department,” said Manson. “We’ve put a lot of emphasis in the [moderate] casual weekend department and on our private label.”
So far the shift has paid off. Because of factors such as rising energy costs, Manson said moderate has been stronger in the year thus far.
“The customer out here wants to be fashion right and price right,” he said. “The challenge in moderate is not to be dated. The trick is to be on an item as fast as a better department would be.”
Many of the larger better vendors have also grown their department store business to its full potential — in many cases, the large in-store shops that flourished just a few years ago have been forced into early retirement by specialty store competition and shrinking retailer margins.
Big players such as Jones Apparel Group and Liz Claiborne are no longer relying on just their better labels to bring in the sales. Instead, they are aggressively pursuing multichannel brand business.
But not all department stores have made the shift. Rich’s/Lazarus/ Goldsmith’s moderate and better breakdown remains quiescent this year.
“Our better business is alive and well,” said Sheila Kamensky, vice president of fashion direction.
Likewise, Draper’s & Damon’s has kept its mix the same.
“It’s been the same for the last few years. We’re finding that moderate merchandise turns more quickly, but we like to maintain a balance because our customers are wanting both from our store,” said Herman Heinle, executive vice president of merchandise.
Dawahare’s, which sells its moderate offerings under private labels and stocks Tommy Hilfiger, Nautica and Marisa Christina in its better category, has cut back on the former’s floor space by 10 percent. The breakdown is 65 percent moderate, 35 percent better.
Last year, the marquee names did not perform, but because Tommy Hilfiger business has seen moderate increases and Lauren by Ralph Lauren has been healthy, better has made a comeback.
Jimmy Dawahare, merchandise manager for the Lexington, Ky-based chain said, however, that Liz Claiborne business has been disappointing.
Macy’s West divisional merchandise manager, Ruth Hartman, said, “Better sportswear had a strong performance for the season and year [and is] picking up double digits over last year. The career and item businesses are strong, and status is starting to turn around.”