SHORT HILLS, N.J. — The Short Hills Mall boasts big department stores including Macy's, Bloomingdale's and Nordstrom, but you probably won't find Ilene Garlock and Beth Silvia shopping at those retailers. They usually bypass the big merchants and head for specialty stores.
"Everything is all spread out at department stores," said Garlock, a 51-year-old teacher from Montville, N.J., who was on her way to Chico's, a women's specialty store.
In a department store, "you find a skirt in one place, and then you have to go to another for the top. You don't get service, and there's nothing special. I like shopping at small stores."
"Department stores are so overwhelming," said Silvia, a 24-year-old casting assistant from Millington, N.J., who said she prefers J. Crew and Banana Republic. At those stores, "it's easy to get in and out. I just don't have a lot of time."
Shoppers like Garlock and Silvia are a growing problem for department stores, which have lost respect and sales in an increasingly competitive environment. But the retailers, realizing they have poor customer service, a cluttered appearance and merchandise that's too similar to that of their competitors, understand they need to change--and soon.
The stores, which seemed destined for extinction after several high-profile leveraged buyouts collapsed in the mid-1980s and early 1990s, enjoyed a resurgence from 1997 through the summer of 1999. That was fed by consumers' freewheeling spending and the emergence of clothing labels like Tommy Hilfiger and Nautica that brought fashion-conscious customers into the stores.
However, over the past year, the traditional department store companies, including Dillard's, May Department Stores, Nordstrom, and Federated Department Stores, have seen their fortunes unraveling. The past six-month period has been particularly rocky, marked by missed sales targets, fashion faux pas and heavy markdowns.
Clearly, the overall retail business, especially apparel, is facing tough times, given a slowing economy, higher gasoline prices and higher interest rates on credit cards. Even the once high-flying Gap and Abercrombie & Fitch are struggling with negative same-store sales.
But department stores, increasingly squeezed by specialty stores and chains like Target, have taken a bigger beating. From January through August, department stores posted a 1% decline in same-store sales, according to Kurt Barnard, publisher of the Retail Trend Report, based in Upper Montclair, N.J.
