×
33 170
Fashion Jobs
H&M
h&m Retail District Manager
Permanent · Seattle
H&M
Data Analyst, CRM
Permanent · New York
H&M
Customer Insights Business Analyst
Permanent · New York
H&M
h&m Retail Visual Manager
Permanent · Dallas
COTY
Manager, Field Education Business (Central us Territory)
Permanent · Oklahoma City
TOO FACED
Executive Director, Product Marketing
Permanent · IRVINE
TIFFANY & CO
Manager, Events & Promotions n.a
Permanent · New York
BECCA
Accounting Manager, Becca Cosmetics
Permanent · New York
RANDA ACCESSORIES
President, E-Commerce
Permanent · NEW YORK
JBCSTYLE
Independent Sales Representative
Permanent · HOUSTON
JBCSTYLE
Independent Sales Representative
Permanent · DALLAS
JBCSTYLE
Independent Sales Representative
Permanent · AUSTIN
JBCSTYLE
Food And Beverage Operations Manager
Permanent · SOUTHLAKE
AVEDA
Aveda Advisor - 15 Hrs - South Park - Charlotte, nc
Permanent · Charlotte
LE LABO
Executive Director, na Sales & Education, le Labo
Permanent · New York
ESTÉE LAUDER
Retail Beauty Sales Manager - Estee Lauder - Carbondale, il
Permanent · Carbondale
CLINIQUE
Retail Beauty Sales Manager - Clinique - Marion, il
Permanent · Marion
SMASHBOX
Executive Director, Global Creative Design & Art Direction, Smashbox
Permanent · Culver City
AVEDA
Manager Creative Operations
Permanent · Blaine
LA MER
Retail Skincare Sales Manager - la Mer - (Easton) - Columbus, oh
Permanent · Columbus
SMASHBOX
Coordinator, E-Commerce, Smashbox North America
Permanent · Culver City
TOM FORD BEAUTY
Director, Global Communications, Tom Ford Beauty
Permanent · New York

Department stores fight back from online challenge

By
Reuters
Published
today Oct 15, 2014
Reading time
access_time 4 minutes
Share
Download
Download the article
Print
Click here to print
Text size
aA+ aA-

PARIS, France - Department stores are starting to enjoy a renaissance after finding ways to attract a new generation of consumers in an age of global fashion chains and online shopping.

Retail consultancy Verdict predicts the global sector should return to growth in 2014 and expand by 22 percent to about $450 billion by 2019. The recovery will be driven by expansion in emerging markets, with China set to account for 30 percent of total spending five years from now.

Harrods in London


Pioneered in France, Britain and the United States around the 1840s by household names like Printemps, Harrods and Macy's, department stores had lost their edge as of the late 1970s, with the rise of stores for fashion, electronics and home wares like Inditex's Zara and Sweden's IKEA.

The advent of e-commerce was the final straw for many stores which had become drab halls catering to an ageing clientele, with the likes of Germany's Karstadt and U.S. mid-market chain J.C. Penney, the latest to flounder.

But some of the oldest names in the business have turned the corner, restoring the grandeur of flagship stores and celebrating their national identity to attract tourists and win back local trade from more rootless global brands.

Many have focused on high-end fashion, accessories and beauty, while also investing in websites and challenging online players like Amazon with convenient in-store pick-up.

"The question is how to stay relevant in a market where everything is available everywhere," Printemps chief executive Paolo de Cesare told the World Retail Congress this month.

"We moved from selling products to creating experiences."


FICKLE TOURISTS?

Founded in 1865, Printemps has renovated its first Boulevard Haussmann store, restoring original mosaics, gold leaf decoration on the roof and Italian stained glass, while sprucing up the interior with exclusive collections from guest brands.

The work has paid off. The Haussmann store saw sales rise 14 percent to 850 million euros ($1.1 billion) in 2012/13.


The Hausmann Printemps, Paris



The Haussmann Printemps store and the neighbouring flagship of the Galeries Lafayette chain with a spectacular stained-glass dome are must-sees for Chinese visitors.

Tourists account for more than half of sales at some stores in Paris and Harrods in London, according to Maarten de Groot, General Secretary of the International Association of Department Stores (IADS). But that can pose a risk.

"The business is fickle," De Groot said, noting the Ukraine crisis has hit Russian demand for luxury goods, while Chinese spending has also slowed.

However, department stores still see plenty of room for growth in emerging markets as urbanisation continues apace.

Thailand's Central Group expects to open five new department stores under the Robinson brand a year for the next five years.

"People want to touch, feel, smell, they want their friends' opinion. They want a gathering place," Sudhitham Chirathivat, the former CEO of the Central Group and now a senior adviser, told Reuters, shrugging off the threat from e-commerce.

Galeries Lafayette plans openings in Doha and Istanbul to add to stores in Casablanca, Jakarta, Dubai and Beijing, while Bloomingdale's best performing store outside Manhattan is the one it opened in Dubai in 2010 with the Al Tayer group.

However, former Bloomingdale's Chief Executive Michael Gould warns that international expansion can dilute brand identity:

"What department stores are is a collection of brands. You can't transfer it to Los Angeles, let alone to a foreign country."


TRUMPING AMAZON

A less risky way to tap overseas demand is via e-commerce.

British employee-owned retailer John Lewis delivers to 33 countries but has no plans to open stores abroad beyond concessions it runs within South Korean chain Shinsegae as it still believes there is plenty of room to expand at home.


A John Lewis store in London



John Lewis saw e-commerce grow more than 25 percent in the first half of 2014 to account for over 30 percent of total sales, helped by its combined online and offline offering. More than half the orders placed online are now collected in a store.

"Millennials love shops just as their parents and grandparents did," managing director Andy Street he said, referring to the generation that came of age from around the year 2000.

Continental European players are way behind in investing online, with none of them making the top 20 of a digital ranking by the L2 business intelligence service that is led by Nordstrom, Macy's and other U.S. and British names.

Chains that don't move with the times will continue to suffer, making them targets for investors attracted by their prime property portfolios and retailing heritage.

China's Sanpower took control of Britain's House of Fraser this year, Qatari investors bought Printemps last year and Thailand's Central Group has acquired Italy's La Rinascente and Denmark's Illum. Speculation is swirling that Germany's Karstadt could eventually merge with its Metro-owned arch-rival Kaufhof.

"Smaller stores will close in some countries where there may be mergers while there will be more and more international consolidation," said De Groot of the IADS.

© Thomson Reuters 2020 All rights reserved.