Byline: Ellen Foreman

WEST PALM BEACH, Fla. — For Dillard’s Inc., it’s time to take a closer look at the merchandising.
After a tough year digesting Mercantile Stores, purchased in 1998, Dillard’s, the $8.7 billion chain based in Little Rock, Ark., is slowing expansion efforts for the next year, limiting growth to under 10 new stores. More attention will given to fine-tuning existing stores, according to William Dillard 3rd, director of replenishment and a grandson of William Dillard, who founded the chain in 1938.
Until its purchase of the 103-unit Mercantile, Dillard’s during the Nineties was the least aggressive of the nation’s major department store chains in the acquisition arena, particularly compared with Federated Department Stores and May Co. And Dillard’s stores, while filled with strong presentations of big brands, seemed hardly distinctive.
“We spent so much time and energy on Mercantile. It put a lot of stress on the company,” said Dillard 3rd on Friday in an interview at a Dillard’s store here, during the launch of a men’s wear collection from France called Daniel Cremieux.
Though it’s not Cremieux’s first foray into the states, it’s currently being sold exclusively by Dillard’s in the U.S. It’s also a sign that the store wants to start rising above the sea of merchandise sameness that plagues retailing.
“Finally, we can take a deep breath and get refocused on our core competency, what we call blocking and tackling,” Dillard 3rd said. “We’re putting a lot of emphasis on how productive our inventory is. We want to see that we don’t have stuff for 18 months, so we can invest our resources in Cremieux — in something that makes us money.” “We took a huge bite in Mercantile and we’re still digesting it. It took us a year to realize that some stores didn’t work out.” After the deal, 26 Mercantile stores were sold off to May Co. and Proffitt’s Inc.
“There’s a lot of fine tuning and a lot of improvement to be had in our existing stores, in terms of serving our customers,” Dillard 3rd added. “I’m working on really trying to improve turnover and profitability.”
Dillard oversees roughly 20 percent of the inventory, including men’s basics such as blue jeans, underwear, men’s dress shirts and shorts.
“Daniel Cremieux is the future of designer brands at Dillard’s,” Dillard 3rd told the crowd of about 100 gathered for informal modeling and brunch at the recently opened unit at the Palm Beach Mall. Dillard expects Cremieux to account for $70 million in sales this year, including its tailored collection. Before Dillard’s, Bidermann had a nine-year association with Cremieux, marketing the line in the U.S., and Spiegel also had an exclusive arrangement that was discontinued, and Tex-Ray of Taiwan in the late Nineties, also manufactured and marketed the label for a short period. Currently in 46 stores nationwide, Cremieux’s collection is slated to be in another 21 stores in the fall, and nearly all 343 Dillard’s stores within three to five years, company officials said. Dillard’s will roll out a national advertising campaign to introduce the brand to the U.S. The line is priced beginning around $35, with $55 for a basic long-sleeve poplin shirt.
A women’s line, now being tested at Cremieux’s Paris boutique, could follow. The licensing agreement with Cremieux gives Dillard’s the exclusive rights to all Cremieux labels in the U.S.
“We want to go very slowly,” said Daniel Cremieux, who attended with his son Stephane, who runs much of the men’s sportswear business. Dillard’s is the first American foray for the Paris-based designer, a men’s wear designer for 25 years, with specialty shops in Japan as well as France.
In the women’s line, co-designed by Cremieux’s wife, Gin, “we have pinstriped suits, shirts and pants to wear close to the body,” he said.
The Cremieux collection came to Dillard’s through Martin Miller, whose Terbell Group represents the label. Miller introduced the label and Cremieux’s son Stephane to Dillard’s chief executive officer, Bill Dillard 2nd, father of Dillard 3rd. “He liked the merchandise, liked the talent and liked that [Cremieux] was a paratrooper,” Miller said. “You don’t find many designers who were paratroopers.” The Dillard’s ceo tapped his son to oversee the development of the line in the U.S.
The collection’s debut is an upbeat development for a company that just a few days before posted disappointing results for 1999, largely due to difficulties assimilating Mercantile. As reported, fourth-quarter earnings fell 64.9 percent, to $26 million. The company had a $55.5 million charge in the fourth quarter related to inventory and the closing of eight stores, four of them former Mercantile stores. Dillard’s projected that the closings would save the company $7 million annually on a pre-tax basis.
The 29-year-old Dillard 3rd got his formal start in the company’s executive development program. In 1995, he moved to Hong Kong and worked on apparel manufacturing, later returning to Little Rock to work on a private label line for children. Discussing the Cremieux merchandise, he emphasized the simplicity and style of the line and said it appeals to him and other guys who “like to wear my running shoes even when I’m not supposed to — like in church and in Paris.”

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