NEW YORK – That stylish atmosphere that once defined America’s department stores is making a comeback.
Racks of marked-down clothes that turned the big stores into Wal-Mart imitators are disappearing, replaced by trendier styles and new affordable fashions from designers such as Calvin Klein and Michael Kors. Stores that looked worn and tired are now brighter and less cluttered.
The changes are evident at Lord &Taylor’s flagship Manhattan store, where women’s clothes are displayed in a more airy, open layout. There are fewer “20 percent off” signs. And there’s a new restaurant run by well-known New York chef Larry Forgione.
A similar transformation at retailers across the country has given the department store industry – which includes merchants such as Bloomingdale’s and Nordstrom – its best sales performance since 1997, a relief after several years of declining business.
“They seem to be turning a corner,” said Carl Steidtmann, chief economist at Deloitte Research, who only a year ago was pessimistic about the department store sector’s prospects.
A big part of the retailers’ strategy has been differentiating themselves from one another – shoppers are less likely this season to find the same Liz Claiborne or Tommy Hilfiger fashions in every department store in every mall. And stores are relying more on their own exclusive private labels.
The merchants are also getting help from some external factors, including consumers’ renewed interest in the dressy clothes that department stores have long been known for, and an improving job market that’s made the retailers’ core middle-class customers feel better about shopping.
Still, as Arnold Aronson, managing director of retail strategies at Kurt Salmon Associates, cautions, “it’s too premature to declare victory.” He said department stores need to maintain their sales momentum through the fourth quarter.
Shopper Jacquelyn Muller said she longs for the “halcyon days of department store shopping, when there was an aura of glamour and intrigue and the feeling that you were somewhere special.”
Now, despite some improveFor the first three months of the year, the department store sector averaged a sales increase of 5.4 percent, compared with a 4.9 percent decline in the year-ago period, according to the International Council of Shopping Centers-UBS sales tally.
The tally is based on what the industry calls same-store sales, or stores open at least a year. They’re considered the best indicator of a retailer’s health.
That was the best performance for department stores since the December 1996 to February 1997 period, which averaged a 9.2 percent gain, said Michael Niemira, chief economist at the International Council of Shopping Centers.
Overall, retailers’ same-store sales so far this year are up 6.5 percent, with discounters’ sales up 5.9 percent and mall-based apparel store sales up 8.1 percent.
The biggest sales growth has come from upscale department stores such as Neiman Marcus and Nordstrom, the first beneficiaries of the economic recovery, having enjoyed double-digit sales increases. But mid-tier department stores owned by Federated Department Stores Inc., which owns Bon Macy’s, have seen some solid improvements – Federated has averaged a 7.1 percent sales increase so far this year.
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