LITTLE ROCK, Ark. — Dillard’s Inc. plans to stop a long-term slide in women’s wear sales by pursuing a younger, more exclusive mix, chief executive officer William Dillard 2d said Saturday.
“We need to have better merchandise than we had drifted into carrying in the late Nineties,” Dillard told shareholders at the company’s headquarters here. Dillard, who spoke for about five minutes at the department store chain’s traditionally brief annual meeting, used phrases such as “younger focus” and “fashion-forward” in describing a major effort to spark its women’s and junior department. Sales in those departments were off 4.8 percent during the 2003 fiscal year, following a 2.8 percent drop in 2002.
In a sign that the company’s efforts might be paying off, Dillard’s said that first-quarter income more than doubled, to $53.8 million, or 64 cents a diluted share, from $24.3 million, or 29 cents a share. Sales for the quarter were up 2.3 percent, to $1.85 billion from $1.81 billion.
Dillard emphasized at the meeting, which was attended by about 30 company executives and investors, that the younger shift will not interfere with its growing reliance on private label merchandise. Last year, private label goods contributed 20.9 percent of total sales of $7.86 billion.
“We’ve almost doubled [private branding] in four years,” Dillard said. Despite this trend, which the company in its annual report called “crucial to its future success in the marketplace,” gross margins declined in all departments but cosmetics in 2003, due to “competitive pressures.”
Dillard’s will be counting on private brands such as Katherine Kelly, Cabernet and Westbound sportswear to fuel a women’s turnaround. The sparse displays on the perimeter of the meeting room largely consisted of merchandise from the department.
Dillard took only a few questions on the fly after the meeting, but said recent speculation that the company might be up for sale had “no credibility.”
Last month, A.G. Edwards & Sons analyst Robert Buchanan wrote in a research report that Target Corp.’s decision to place its Marshall Field’s chain on the block would likely prompt major department store firms to consider making a bid for Dillard’s as well.
“That was in the context of Field’s being sold,” Dillard said, dismissing the possibility that the company founded in the 1930s by his father and run by the family ever since might be on the block.