Thursday, August 03, 2006

Parisian has rich, eventful history

Industry changes result in end of era

The Birmingham News

BIRMINGHAM, Ala. -- It is quite possible that the last Parisian sign could come off the last store exactly 120 years to the day two sisters hung their shingle for The Parisian Dry Goods and Millinery Co. on a building at 2030 First Ave. North.

The date was Oct. 5, 1887, and was the start of a rich retailing history that survived the Great Depression, a failed leveraged buyout, multiple ownerships and the persistent ebbs and flows of the retail business.

Charlotte-based Belk Inc. is buying Parisian in a $285 million deal and said it will launch a rebranding campaign of all of the stores into Belk in the third quarter of 2007. That last sign change may very well take place on Oct. 5, 2007.

Few will note the passing of the Parisian name as nostalgically as Donald Hess.

"Of course from a family perspective and just as a citizen of Birmingham, it is very disappointing and very sad for us," Hess said Wednesday. "We feel like for three generations of my family at least we had a great run and had a lot of fun at it."

His grandfather, Carl Hess, purchased Parisian in 1920 and soon brought William Holiner on as a partner.

They sought to establish Parisian alongside the bellwethers of Birmingham retailing at the time - Pizitz, Blach's, Kress, Loveman's, Burger-Phillips and Odom-Bowers & White.

Just as Parisian moved into a larger more exclusive space, the Great Depression hit and temporarily did the company in until it emerged after a restructuring.

Donald Hess' father, Emil, took over the company after World War II along with Holiner's son-in-law Leonard Salit.

They sought to distinguish themselves from competitors with the growing popularity of credit cards. Where others were charging 1.5 percent interest, Parisian began offering six months with no interest - a novelty for the business at the time.

That and similar merchandising and customer-service initiatives propelled the company's growth. In 1963, Parisian began expanding into Five Points West, Decatur, Vestavia Hills and Eastwood.

Hess became president of the company in 1972, and expansion and the growth continued well into the 1980s as Parisian became known as the place for cutting-edge fashion.

"We continued to expand the business and take the things we thought were great about Parisian into any new market we went to," he said.

Parisian went public in 1983. In 1988, Australia's Hooker Corp. bought the company for $250 million. A year later, Hooker filed for bankruptcy, allowing the Hess and Hal Abroms families to regain Parisian and continue with its growth.

"There were a lot of days that were just spectacular in terms of the volume we generated, the people we were able to hire, the excitement of our employees, the excitement of the holiday business, reaching milestones in terms of sales," Hess said. "There were a lot of those days. There were days when we didn't make the numbers and the frustration of how do you do that, particularly as the industry started changing so dramatically in the'90s."

A discussion over a golf game with Proffitt's CEO Brad Martin in 1996 led to Parisian selling to that company for $450 million. Proffitt's moved its headquarters to Birmingham from Knoxville. In 1998, Proffitt's bought Saks Fifth Avenue and became Saks, keeping its headquarters in the Magic City.

Hess said he does not regret selling the company.

"I don't have a crystal ball or a look-back ball. I don't know where the company would be today if we hadn't decided to sell to Brad and Proffitt's 10 years ago; whether we could have made it on our own or not," he said. "I think it would have been a very tough road for us.

"I know the industry was changing," he added. "I think we had to be part of a bigger corporate structure at the time to rationalize the costs."

When Saks announced it planned to sell Parisian a few months ago, many wondered if Hess might make a move to regain the company as he did in the late'80s.

"There were a lot of rumors to that effect," he said. "It's a tough business that has changed dramatically. It would be presumptuous for me to assume I could jump back in there and make a difference and run that business as a free-standing business."

On Wednesday, Belk and Saks announced the latest deal, putting the Parisian name and history in the hands of rapidly expanding Belk, which, like Hess recognized a decade ago, can't afford to operate it as a stand-alone company and is opting instead to assimilate it into its existing brand.

But Hess said he can't be critical of the decision to sell to Belk, especially since he helped make it.

"I can't say it's unfortunate," he said. "I'm on the board of Saks. I was involved in the process over the last several months and the decision to put Parisian up for sale. I was involved with the board meeting when the decision was made (Tuesday)."

`Good old days':
For many, Parisian has been sort of in a state of flux since Proffitt's bought it a decade ago and ownership shifts and leadership changes have left the stores short of where they had once been.

But Hess said retail is not only cyclical, but it is evolving. There are reasons why the Pizitz, Kress, Loveman's and other stores don't exist anymore.

"I think people always want to remember the `good old days.' That doesn't mean the current days aren't also good days," he said.

"We do have some businesses that weren't around during the'70s and'80s when we were expanding so dramatically," he added. "We have some stores that weren't even around then and now they're coming around. Other businesses will grow and flourish in this town. We did have a great presence of retailers headquartered here, but that was true of most cities because that's how retail worked. It's no longer true of most cities because the industry has changed."

Instead of looking back with longing, Hess said he prefers to take pride in what Parisian accomplished.

"I feel like Parisian and the leadership of Parisian and the associates of Parisian have made a major impact on this community in just being good citizens and concerned about its well-being," Hess said. "We created a high standard so that other companies in some cases had to raise their standards because customers talked about the service they got at Parisian."

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