Department Stores

As Christmas nears, many needy institutions seek the public's charity dollars. Please consider the local department stores. It shouldn't be hard to feel charitable. In many cases, it's the time of year they're most attractive--bustling with life, offering such rare services as salespeople and free gift wrap. In some cases, the need is particularly poignant: They may not be around next year. Their desperation shows. Some kicked off their Christmas season by Halloween this year.

Ron Johnson was ousted as chief executive of J.C. Penney Co. after a remarkably short and gaffe-filled tenure that succeeded mainly in driving away customers. Johnson was lured 17 months ago from a top job at Apple Inc., where he was celebrated for pioneering the technology giant's cutting-edge retail stores. But he stumbled badly at J.C. Penney, pursuing an unorthodox upscale strategy that alienated the company's budget-minded base. His time at the helm of the 110-year-old department-store chain was marked by unusually sour statistics: Revenue tanked 25% in a single quarter.

With a remarkable consistency that's beginning to match the swallows' record at Capistrano, investors this spring are once again bidding up shares of the big department store stocks. It's happened for five straight years now. But if past is prologue, many of the stocks will turn into lumps of coal by the time the holiday shopping season arrives. That's because investors' expectations of continuing strong retail sales, and their ardor for the stocks, are typically dashed as the year rolls on.

Retailers got a much-needed boost in January after a lackluster holiday shopping season, using post-holiday clearance deals to lure cagey consumers worried about higher payroll taxes. H&M's coupon for 30% off this week drew Toluca Lake payroll accountant Katy Genovese to the store at the Americana at Brand shopping center. She walked out with a $20 dress and $30 in shirts. Genovese, 57, and her shopping partner, Lori Berlanga, 45, said they spent January hitting up malls for bargains that are increasingly plentiful and longer-lasting.

Donald Dayton, former chairman of Dayton's department stores, has died of cancer at age 74. Dayton, the eldest of five brothers who made Dayton's into a retailing giant, underwent surgery for colon cancer last year and had been critically ill for the last six months, family members said. He died Thursday. Dayton Corp. merged in 1969 with J. L. Hudson Co., forming the Dayton-Hudson Corp., which now has 660 stores in 38 states and is the nation's fifth-largest retailer. The company owns the Target discount store chain, Mervyn's department stores and the Lechmere promotional discount store chain.

Gottschalks Inc. said it agreed to buy the assets of Harris Co., including nine Southern California department stores, for about $39.8 million plus the assumption of debt. Fresno-based Gottschalks agreed to give El Corte Ingles, Harris' Spanish parent, 2.1 million shares of Gottschalks stock, worth about $17.6 million, and a $22.2 million note due in 2003. The company would also assume an unspecified amount of debt. The transaction is expected to close by August.

Blasts from several bombs planted on motorbikes ripped through three department stores in Thailand's restive south, killing four people, including a 29-year-old Canadian, and wounding dozens, authorities said today. The attacks in the region's main commercial center of Hat Yai came just hours after the military staged a peace rally in the south, the site of a Muslim insurgency, where it expressed hope that people would work with authorities to end the violence.

David C. Farrell, president of the St. Louis-based parent of May Co. California, said sales so far in June have been better than May's 5.6% gain, but he does not expect the gain in second quarter sales and for the rest of the year to exceed the first quarter sales increase of 14% from a year earlier. However, May Department Stores' 1985 sales will surpass $5 billion and profits are expected to hit a new record, he told the company's annual meeting.

The St. Louis owner of the May Co. department stores in California said Sunday that it has launched an effort to acquire the corporation that owns Robinson's department stores in a $2.7-billion stock transaction that would rank as the largest merger in the hotly competitive retail industry. May Department Stores disclosed that it had made its offer to buy Associated Dry Goods of New York in a letter hand-delivered Friday to Joseph H. Johnson, chairman and chief executive.

May Department Stores Co. has agreed to buy a 14-store chain founded by the Mormon church 132 years ago. The $52-million stock deal with ZCMI--formerly Zion's Cooperative Mercantile Institution--gives May a foothold in Utah and Idaho, two states where it had little presence. ZCMI will keep its name during a transitional period but eventually will change its name to Meier & Frank, a May property with eight stores in Oregon and Washington.

The salesmen at the Spring Street Arcade spend their day gazing out at a city that's passing them by. All around, a trendy downtown is on the rise - pet stores selling gourmet dog chews, chic bars with ginger and juniper soda cocktails, a new generation of mostly young residents jogging in spandex and cruising on bikes. But inside the 88-year-old shopping arcade, with its giant curved skylight, arched Spanish Renaissance entryways and Beaux Arts exterior, many of the stores are vacant, and the remaining merchants seem stuck in another era. Bargain-rate clothes, toys, suitcases and DVDs share shelf space with dusty boomboxes and T-shirts from '90s rock bands like Korn and Nirvana.

At midnight on Thanksgiving night, Narine Anton and her regiment of 10 workers will welcome shoppers into Body Basics at the Glendale Galleria. That's if she doesn't decide to open the specialty shop even earlier. Anton, manager of the store stocked with pajamas and cotton basics, is considering moving the time up to 10 p.m. on Turkey Day. "If we open earlier, then maybe we can get the traffic from Macy's or Target and make more money," she said. "If we don't open with the big stores, they have extra hours with customers and we miss out on that.

Department store giant Macy's Inc. reported a nearly 16% jump in second-quarter profit as online sales grew and shoppers responded enthusiastically to its localized merchandise offerings. For the three months ended July 28, the parent company of the Macy's and Bloomingdale's chains said Wednesday that profit rose to $279 million, or 67 cents a share, compared with $241 million, or 55 cents, a year earlier. That beats expectations of analysts surveyed by Thomson Reuters who predicted 64 cents a share.

Luxury retailerNordstrom Inc.is partnering with British clothiers Topshop and Topman to sell the brands in 14 of its department stores, including two in Orange County. Nordstrom will be the biggest U.S. retailer carrying a wide array of apparel and accessories from the fast-fashion retailer, which already has stand-alone stores in New York, Chicago and Las Vegas. Another is planned for the Grove shopping center in Los Angeles' Fairfax district this Christmas season. Topshop is the women's side of the brand, and Topman carries the men's merchandise.

--Madewell, the younger, more relaxed division of retailer J. Crew Group Inc., is going mobile this spring. Think less smartphone and more road trip. The brand, formally a work wear manufacturer in Massachusetts before getting rescued by J. Crew, is taking its denim line on a cross-country summer journey with a retro Airstream trailer. Retailers have been trying to shake up brick-and-mortar stores with more creative spaces such as pop-up shops, specialty stores and now stores on the go. Madewell's Airstream is rolling into Santa Monica Place this Saturday, loaded with stylists, discounts on jeans and a hair-braiding station.

Owners of the Glendale Galleria have launched a massive makeover intended to update the regional shopping center in downtown Glendale. Improvements to the 1.5-million-square-foot center will include the previously announced addition of a Bloomingdale's department store in the space formerly occupied by Mervyns. The Bloomingdale's store is set to open next year. Other changes will be the most comprehensive since the mall opened in 1976 and "nothing short of dramatic," General Manager Larry Martin said.

Behind Monday's announcement that once-venerable Broadway Stores will be acquired by Federated Department Stores looms a question that has vexed the retail world for the last five years: Can the full-scale department store survive? The answer, industry analysts and executives say, depends on a simple premise: Department stores must persuade women shoppers to once again buy the merchandise that they have for sale.

Nine West was the top handbag brand sold in department stores during 1998, according to NPD Group Inc., a Port Washington, N.Y.-based market research firm that tracks retail sales. Nine West accounted for 17% of handbag sales (measured by dollar volume), followed by Coach (16%), Liz Claiborne (11%) and Dooney & Bourke (7%). Private-label handbag manufacturers generated 8% of sales. More than 75% of handbags sold for $50 or less, according to NPD.

J.C. Penney Co. is hoping that a turnaround strategy will someday make its most recent quarter, with its $87-million loss, just a bad memory. The Plano, Texas, company, armed with a new chief executive and retooled pricing, said Friday that its fiscal fourth-quarter slide was caused by long-ingrained bad habits — such as rolling discounts and outdated stores — as well as by efforts to improve on them. In the period ended Jan. 28, the $87-million loss, or 41 cents a share, was a plunge from a $271-million profit, or $1.13, in the same quarter a year earlier.

After a poor holiday season, J.C. Penney Co. is revamping its strategy by retooling its store format, marking down its merchandise and simplifying its promotions. "We are rethinking, we are reimagining, and if we find we have picked up some bad habits through the decades, we will leave them far behind," Chief Executive Ron Johnson told industry analysts Wednesday. The retailer will adopt a simple pricing model and do away with the hundreds of sales it has sprinkled throughout the year.