10022-SHOE

Reuters

New York's famed Saks Fifth Avenue department store plans to open a shoe department so big it has been granted its own ZIP code, 10022-SHOE, the company said on Thursday.

Saks said it plans to nearly double the number of shoes for sale and take over the entire eighth floor of its flagship store in Manhattan. The expanded department will open in September under the name 10022-SHOE.

"10022-SHOE will also hold a place in U.S. history as the first floor to be granted its own designated ZIP code by the United States Post Office," Saks said in a statement.

The news may delight women with shoe obsessions to rival that of former Philippines first lady Imelda Marcos.

"Visitors to the new eighth floor will be greeted by a seemingly endless array of shoes," the statement said.

Gap Is in Need of a Niche

By MICHAEL BARBARO and HILLARY CHURA

In the fall of 2004, Gap put on a splashy ad campaign called, “How do you wear it?” with Lenny Kravtiz and Sarah Jessica Parker. It featured the pair dancing in customized Gap jeans — his with metal studs down the seam; hers with a waist-to-cuff velvet ribbon.

It was just the kind of envelope-pushing fashion Gap needed to compete with popular new designer-inspired denim brands like Diesel, Rock & Republic and Seven for All Mankind.

But there was a catch: the bedazzled jeans, which Gap called a “celebration of personal style,” could not be found at its stores.

Consumers had to buy a pair of basic, unembellished jeans at the store and customize them at a special training sessions held at some Gaps, or take a trip to Home Depot and Jo-Ann Fabrics and figure it out themselves.

The marketing tease is a small case study in what has ailed Gap, which ousted its chief executive, Paul S. Pressler, this week after years of dismal performance at its Gap and Old Navy divisions.

At a time when small, narrowly focused fashion brands — Coach, Juicy Couture, Tahari, Laundry — have become ascendant in American retailing, Gap has served up a steady diet of simple, unobjectionable casual clothing designed to appeal to everyone.

How do they wear it, as the ads asked? Increasingly, they just do not.

In an era of niches, when exclusion is as vital as inclusion, Gap has become an anachronism: a single chain, selling only its own brand, with one point of view, chasing shoppers from birth to death.

“If you stand for everything in fashion today, you stand for nothing,” said Paul R. Charron, the former chief executive of Liz Claiborne, who is credited with revitalizing the clothing company by purchasing fast-growing brands like Juicy Couture and Lucky Brand.

“Brands like the Gap, brands broadly available,” Mr. Charron said, “have a special challenge to be relevant in a period when focus and exclusivity are so important.”

Indeed, consumers are abandoning the chain in staggering numbers. Sales at stores open at least a year, a standard measure of a retailer’s health, have fallen or remained stagnant for 28 of the last 30 months.

And the declines have not been small. Sales fell 8 percent in December and November and 7 percent in October — the most crucial months of the year. The word “disappointing” became a common refrain in every monthly news release explaining Gap’s performance.

Gap operates three divisions: Gap, Old Navy and Banana Republic. All three have struggled, but only Banana Republic is on the rebound.

Niche brands, by contrast, have done so well that they have even reversed the fortunes of the American department store. In the last year, the performance of department stores like Nordstrom and Macy’s has quietly overtaken that of specialty clothing retailers like Gap.

The reason? “Consumers want brands, and we are all about brands,” said Stephen I. Sadove, chief executive of Saks Inc., whose sales have improved sharply in the last year on the strength of designer labels like Tahari and Theory.

“It’s very hard for the specialty clothing stores to keep themselves cutting-edge and fresh,” Mr. Sadove said. “There is a lot of sameness.”

Or walk into the handful of specialty clothing chains like Abercrombie & Fitch, American Apparel and Anthropologie, stores that, like Gap, design their own clothing but have managed to thrive by appealing to small slivers of the public.

Those stores’ environments leave no doubt who their shopper is supposed to be — vintage-loving, 30-something urban women (at Anthropologie); trend-obsessed, preppy teenagers (at Abercrombie & Fitch); and socially conscious hipsters in their 20s and 30s (at American Apparel.)

Abercrombie & Fitch is openly hostile to what it considers the wrong customer — typically anyone over 30 — warding them off with booming music, dark shades on the front windows and teenage employees standing out front.

Gap has veered to the other extreme, putting out a welcome mat to nearly everyone, with well-lighted, sparsely decorated stores and ageless fashions.

“The definition of a specialty store is focus,” said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting firm and investment bank.

Gap does not have that focus, Mr. Davidowitz said. And in trying to meet the needs of infants, teenagers, and even the elderly, its designers play it safe, season after season. “The merchandise is booooooring,” Mr. Davidowitz added. “Too basic.”

Patricia Longo, a 36-year-old makeup artist who lives in Manhattan, is the kind of style-obsessed shopper who has little use for Gap these days. She wears Ugg boots, a Betsey Johnson bag, a Pepe Jeans jacket and a cotton taupe Ella Moss dress.

“They don’t have the new fads,” she said of Gap. “When I look for something new and young and trendy, Gap is not coming to my head.”

And it is not that she buys only designer clothes. Ms. Longo covets designer knockoffs, which is why she shops at H&M, the Swedish retailer known for its fresh-from-the-runway fashions.

So what is Gap to do?

A Gap spokesman, Greg Rossiter, said the company was “totally committed to returning these brands to the leadership they enjoyed for so many years.”

For that to happen, retail analysts said, the chain could start by shrinking, to give its clothes the kind of cachet that Gap had decades ago, before it operated 1,295 stores (not to mention hundreds more Banana Republic and Old Navy stores, which bring the total to more than 3,000). Abercrombie & Fitch, for example, has 361 stores for its flagship brand.

Next, analysts said, it could experiment with brands, as several new specialty clothing stores have started to do. When Martin & Osa, a clothing store aimed at people in their 30s created by American Eagle Outfitters, opened in 2006, it carried its own store brand as well as bags from North Face, sunglasses from Ray-Ban and track jackets from Adidas.

Gap used to carry Levi’s jeans but stopped in 1991. Today, it stocks a single outside brand, Converse sneakers.

Finally, Gap could focus on a narrow group of consumers, and tailor clothing to meet their needs — a prospect that would probably require the chain to become much smaller. “They have to pick out a demographic and go after it with a maniacal focus, to the exclusion of anyone else,” said Bob Buchanan, an analyst at A. G. Edwards & Sons.

“If there is one thing you cannot be in the middle of the mall anymore, it is all things to all people,” he added. “And that is what Gap has been trying to do.”

Saks' Logo Gets a Makeover

By Sandra O'Loughlin

NEW YORK -- Saks Fifth Avenue in January will unveil a new logo that will appear in advertising, shopping bags, merchandise and marketing materials. Pentagram Design developed the logo, which was incorporates Saks Fifth Avenue's classic script logotypes and the geometry of the perfect square, a shape that has become central to the identity of the retailer, from its catalogs to its employee pins.

The move is the latest initiative in a revitalization strategy under Stephen Sadove, who in January became CEO of parent company Saks Inc.

Under Sadove's predecessor, Brad Martin, the upscale department store tried to become more edgy in an effort to appeal to a younger consumer, a strategy that did not work. Sadove is on a mission to repair the store's image by ensuring stores stock merchandise for its core 48-year-old customers and at the right inventory levels, re-instituting its private label brands and bringing back petite sizes. Several of the stores have been remodeled.

A branding program and signature visual created by splitting the logo into 64 square pieces and then re-sizing, rotating and recombining them will appear on stationery, storefronts, charge cards and more. Designers including Diane von Furstenberg, Christian Louboutin, Albert Kriemler of Akris, George Sharp of Ellen Tracy and the design team of Moncler are collaborating with Saks to develop exclusive items incorporating the new visuals.

"Graphic, bold and sophisticated, the new branding initiative is not only a redesigned logo but a new visual language," said Terron Schaefer, group SVP, creative and marketing, in a statement. Schaefer anticipates the logo will become an enduring icon like that of Burberry's Nova Check and the Louis Vuitton LV.

Saks operates 54 full-line stores in 25 states as well as 50 Off 5th Outlet stores and saks.com.

Saks shelves youth look to reclaim core clientele

Two years after dramatic shift in styles, it returns to its well-heeled roots

From Staff and Wire Reports
Richmond Times-Dispatch

RICHMOND, Va. -- Benjamin DeWinter believes his business is beginning to bloom again.

The manager of the Saks Fifth Avenue store in Richmond knows firsthand the struggles the chain has dealt with in the past two years, largely with fashion merchandise that skewed too young.

Chasing after those younger customers often alienated Saks' core shopper, who averages 48 years old.

Now Saks wants to reclaim its status among the well-heeled by selling more classic merchandise, including brands such as Ellen Tracy and Hart, Schaffner & Marks.

"We have a lot of customers who are from New York or Florida and have previously shopped in Saks," DeWinter said. "The history they brought was of the old Saks, but they came into a changed Saks."

The merchandise shift, which began in early 2004 under a former management team, didn't sit well with many shoppers.

"There was a cultural change. People are more comfortable of going back to their roots," DeWinter said.

"We do need to attract a younger customer, but you can't walk away from your classic customer base," he said. "We moved too rapidly."

Those changes took place just months after Saks opened its local store at the Stony Point Fashion Park in September 2003.

"That was a challenge for us . . . as we were going through our infancy," said DeWinter, who has managed the local store since it opened.

The recent shift at Saks is reflected in a new fall ad campaign that embraces a broader approach to fashion, highlighting more than 20 different must-haves, from fur-trimmed coats for women to rugged sport boots for men.

Later this year, the chain will bring back its petite merchandise, which had been eliminated two years ago. And Hart, Schaffner & Marks suits are available at six Saks stores, including the one in Richmond.

"We are beginning to see the light at the end of the tunnel. You will see a good fall, and it will continue through next year," said Ron Frasch, vice chairman and chief merchant at Saks Fifth Avenue Enterprises.

The chain also is refocusing on stores other than its Fifth Avenue flagship location. The chain operates 54 Saks Fifth Avenue stores and 50 Off 5th stores.

Its stores outside New York City often were overlooked, analysts say. Saks now is renovating some of those stores, including ones in Boston and Beverly Hills, to feature open cosmetic counters and more appealing fashion displays.

The Richmond store is nearly full with fall merchandise, a stark contrast to its spring selling season when some departments received little or no clothing or accessories.

To win back its most loyal customer, the chain is offering the Saks Fifth Avenue Private Collections, a replacement for Real Clothes, its store label brand that was dropped last year.

While trendy labels remain key, Frasch noted the company is beefing up selections in classic names in both men's and women's suits, as well as stocking up on such basics as bras. Saks is also investing more in couture lines such as Chanel and Fendi.

"We had become too clean," Frasch said. "We want to put more products on the floor so customers can see the depth and breadth of our offering."

Another key element is tailoring its stores to the local market by price and by consumer mindset, such as classic or contemporary.

For example, the Richmond store has merchandise that appeals more to a Southern, sophisticated, classic woman, DeWinter said.

The local store also has made other changes, including expanding its offering of women's contemporary apparel.

That department took over the area that had been devoted to men's contemporary clothing, which now has been combined with men's sportswear. Doing so gives the men's area the appearance that it is packed with merchandise.

Saks executives say a cultural change is sweeping the company, with buyers taking bigger risks on fashion instead of playing it safe and fixating on inventory control.

Still Saks faces heavy competition at the upper end from Neiman Marcus Inc., whose name is synonymous with luxury shopping, and at the lower luxury tier from Nordstrom Inc.

"Saks is facing a competitive situation where both Neiman and Nordstrom are doing extremely well. The issue is how successful will [Saks] be in executing from a merchandising and service standpoint," said Michael Appel, managing director of Quest Turnaround Advisors LLC.

Doug Harrison, president and CEO of Harrison Group, a strategic consulting group, noted that Saks Fifth Avenue is behind Neiman Marcus in personalizing customer service. He cited the success of Neiman Marcus' program called InCircle, which rewards customers with giveaways and special discounts based on how much they spend.

Saks could catch up, but it won't be easy, said Andrew Sacks, president of AgencySacks, an advertising agency focusing on upscale companies. Neiman Marcus is more attuned to fashion, he noted.

Steve Sadove, chief executive officer at parent company Saks Inc., told investors recently that consumers have not gone away.

"They may not be buying as much," he said. "And as we've started to have the right products, they are coming back."

Askin' for a little respect

Samantha Thompson Smith, Staff Writer
The News and Observer, Raleigh, N.C.

RALEIGH, N.C. -- All we ask, Macy's, is that you don't break our hearts.

We can't take it from another department store chain, you see. We've been through enough already.

It's not that we haven't been welcoming. For almost two decades, we've opened our arms and hearts to new department store chains to the Triangle -- chains that promised us the best, but often didn't actually deliver.

You see, after Hecht's took over Thalhimers in the early 1990s, it opened its new Crabtree Valley Mall store. We were promised an "A" store -- packed with brands that weren't already in the market and were considered high-end, designer, contemporary. In the end, we got Lauren, Tommy Hilfiger, Liz Claiborne and Nautica. Nice stuff, but most of it wasn't exclusive or different. In fact, it was a lot like what we already had at Belk.

It got more painful than that. Who could forget the slow, painful death of Lord & Taylor at Crabtree? It, too, was promised to be an "A" store when it opened in 1995 packed with many of the same merchandise -- such as Tahari and Oleg Cassini -- as at Lord & Taylor stores in bigger markets.

By the time it closed in late February, it was a messy outlet type of store full of two-seasons-old clothes from other defunct Lord & Taylor stores.

We're still not sure how our relationship is going with Nordstrom and Saks Fifth Avenue. However, there are some signs the stores aren't giving us the best they have to offer.

Take the Nordstorm at Durham's The Streets at Southpoint. And then look at the 16-page Nordstrom ad in the September Vogue magazine. The ad is packed with brands that aren't in the store: Chloe shoes, Zac Posen handbags, Proenza Schouler coats. At least we can get them online at www.nordstrom.com.

Then there's that little issue about the Charlotte Nordstrom at SouthPark mall, which carries contemporary designs by Tracy Reese, Chaiken, D&G and Milly.

And the Saks Fifth Avenue at Triangle Town Center still doesn't have some of the luxury brands, such as Gucci and Prada, we've been hoping for since it opened two years ago.

Of course, there hasn't always been disappointment. When Dillard's bought Ivey's in the early 1990s, Dillard's didn't make promises. The only real worry was that Dillard's wouldn't have sales as good as Ivey's used to. Today, Dillard's continues to improve its brand mix, including the addition of Kors by Michael Kors, Kenzie, BCBG Girls and David Meister, brands that help it stand out a bit from other department stores.

And who could forget the department store chain that raised us: Charlotte-based Belk. If anything, the chain has only gotten better. The Belk at Crabtree is among the only retailers in the state selling women's apparel by contemporary designer Marc Jacobs. It's also stocked with a collection of BCBG Max Azria, Elie Tahari and Theory separates and Betsey Johnson and Vera Wang dresses -- brands that used to only be found at specialty stores.

We'll give you a chance, Macy's. All we ask is that you do the same for us.

© Copyright 2006, The News & Observer Publishing Company

Only 10 pre-WWII store buildings still operating with same name?

According to sfpaul900 at remembering _retail, now that Carson Pirie Scott & Co. is closing its downtown Chicago store, and Marshall Field & Company is becoming Macy's a block away, there are only about 10 pre-WWII department store buildings still operating with their original names.

• Bloomingdale's 59th & Lexington, NYC 1886
• Macy's Herald Square, NYC 1902
• Macy's Parkchester, Bronx, NYC, 1941
• Saks Fifth Avenue, NYC 1924
• Saks Fifth Avenue, Wilshire Blvd, Beverly Hills 1938
• Bergdorf-Goodman, NYC 1928
• Lord & Taylor, NYC 1914
• Lord & Taylor, Manhasset, NY 1941
• Neiman-Marcus, Dallas 1914
• Boston Store, Milwaukee (I don't know the date, but it looks to be1920's vintage)

Can anyone think of any others?