Walettea Scott plans to make several holiday shopping trips this year, one of which will almost certainly include a department store.
“I usually start at Wal-Mart or Best Buy for the deals,” said Scott, of Aurora, while loading Dora the Explorer toys into her cart at the Glendale SuperTarget. “But I’ll probably move on to the Cherry Creek mall and get some things at Macy’s.”
Traditional midpriced stores in the downtrodden department-store sector are counting on shoppers like Scott to help them turn a corner.
Analysts say the sector is doing a better job of attracting customers with more fashionable offerings, but this season will likely be a true test of how successfully they can compete with the discounters and luxury stores that have stolen their market share.
Early signs point to success, but shoppers and analysts have conflicting opinions about how strong the sector is becoming.
“Department stores are featuring trendier fashions, exclusive lines and edgier advertising,” said Roger Selbert, a retail analyst and editor and publisher of IntegratedRetailing .com. “The comeback of department stores is definitely a trend.”
For the past few months, same- store sales at department stores have increased, outpacing the gains at specialty apparel chains.
Perhaps more significant, 65 percent of those who responded to a survey by Brand Keys Inc., a New York brand and consumer-loyalty research firm, said they intend to shop at traditional department stores during the holidays. That was a 10 percent gain over 2005.
The National Retail Federation also reported that 79.1 percent of 18- to 24-year-olds – an age group recently thought to be abandoning department stores – planned to shop them for holiday merchandise.
“Department stores, to their credit, have retooled. They’ve reenergized to occupy a unique place in the market,” said Cherry Creek mall general manager Nick LeMasters. “The days of being all things to all people are past, but they are better understanding their core customers.”
Luxury department-store chains such as Neiman Marcus, Nord strom and Saks Fifth Avenue have largely been insulated from the downturn, and most analysts who speak of a turnaround in the department-store sector focus on midpriced chains such as Macy’s, Kohl’s and J.C. Penney.
Experts point to several factors driving change at those chains.
Department stores have focused their efforts on offering more stylish merchandise and private labels that can’t be purchased at specialty retailers.
Private-label lines “are being viewed as authentic 21st-century brands that compete with each other,” said Brand Keys president Robert Passikoff.
Many department stores have been redesigned to resemble multiple boutiques, the retail sector that’s nipping their sales.
But not everybody is convinced that department stores are headed for a resurgence.
Stephen Hoch, a marketing professor and director of the Baker Retailing Initiative at the University of Pennsylvania’s Wharton School, said recent increases in same-store sales have been skewed by consolidation and store closings.
While converting May’s regional chains to the Macy’s nameplate, Federated shuttered 80 stores in markets that overlapped. The recent boost in same-store numbers was likely led by other Federated stores and competitors that absorbed market share from shuttered stores.
“It’s quite likely that other department stores benefited from the closing,” Hoch said. “Quite frankly, the department-store sector has given up.”
Even some shoppers say that, for all the changes, department stores just don’t wow them.
“The way they present stuff at Macy’s just isn’t that appealing,” April Champness of Nederland said while Christmas shopping with a friend at FlatIron Crossing mall in Broomfield.
Federated did not close any Colorado Foley’s stores after acquiring its parent company, May, and local mall managers say the conversion to Macy’s has helped them by reigniting interest among shoppers and competition among rivals.
Macy’s has “made the other department stores aware and ready to go. They realize that service is going to be a big key this year,” said FlatIron Crossing general manager Hugh Crawford. “Macy’s has a pretty good grasp on that, where Foley’s didn’t get it.”
Staff writer Kristi Arellano can be reached at 303-954-1902 or karellano@denverpost.com.
