Dillard’s may buy area Boston Store buildings
Store chain is known for quality, customer service
Dillard’s Inc. department store chain could be entering Wisconsin, which might include replacing three Milwaukee-area Boston Store locations that are closing this summer.
Dillard’s executives are considering opening stores at what are now Boston Store buildings at Brookfield Square, Mayfair and Southridge Mall, as well as a Younkers store building near Green Bay, according to sources familiar with the company’s activities.
Those sources asked not to be identified because they are not authorized to speak for the company.
Julie Guymon, a spokeswoman for Dillard’s, declined to comment Wednesday on the possible expansion.
A spokesman for W.P. Carey Inc., the New York-based owner of the prospective Dillard’s locations, couldn’t be im-
mediately reached for comment.
Dillard’s, based in Little Rock, Ark., is profitable — unlike Bon-Ton Stores Inc., the former operator of Boston Store, Younkers and other department stores. Bon-Ton was sold in an April bankruptcy auction to a group of liquidators.
Dillard’s in May reported first quarter net income of $80.5 million, or $2.89 a share, compared to net income of $66.3 million, or $2.12 per share, for the year-earlier period. That was a 21.4 percent increase.
The company’s sales, including its construction business, totaled $1.46 billion, a 2.7 percent increase from $1.42 billion.
Sales at stores open at least a year — a key measure for retailers that is also known as same-store sales — increased 2 percent.
That occurred despite being in a segment — mall-based full-service department stores — that has lost sales to internet retailers and limited-service department stores, such as Menomonee Falls-based Kohl’s Corp.
Opportunity to expand
Dillard’s has thrived, in part, by offering merchandise that’s more upscale than such challenged competitors as Sears and J.C. Penney, said John Melaniphy, who operates Chicago-based retail consulting firm Melaniphy & Associates Inc.
Also, Dillard’s is known for providing good customer service, he said.
The department store chain operates 292 stores in 29 states, mainly in the nation’s southern two-thirds. Dillard’s closest department stores to Wisconsin are in eastern Iowa.
The liquidation of Bon-Ton, which splits its corporate offices between Milwaukee and York, Pa., creates expansion opportunities for Dillard’s, said Dick Seesel, an industry consultant.
“I think it’s an opportunity for them to establish more of a national footprint,” said Seesel, who operates Mequon-based Retailing in Focus LLC.
Most of Bon-Ton’s stores, which include the Bon-Ton, Bergner’s, Carson’s, Elder-Beerman and Herberger’s chains, are in the Upper Midwest and Mid-Atlantic.
Those include states such as Minnesota, Illinois, Michigan and Pennsylvania, where Dillard’s operates few or no stores.
In Wisconsin, Bon-Ton is closing more than two dozen department stores.
In the Milwaukee area, those include Boston Store locations at downtown’s Grand Avenue mall and Bayshore Town Center, in Glendale. Dillard’s has apparently not shown any interest in those two locations.
Store buildings sold
Bon-Ton in 2015 sold six department store buildings to a W.P. Carey subsidiary for $84 million, and then agreed to lease back those properties for 20 years, according to a U.S. Securities and Exchange Commission filing.
Those properties include the Boston Store buildings at Brookfield Square, Mayfair and Southridge.
The other W.P. Carey-owned stores include a Younkers store at Bay Park Square, a mall in Ashwaubenon.
The remaining properties in that 2015 sale were in Joliet, Ill., and Fargo, N.D. — both areas where Dillard’s doesn’t operate.
All of the company’s stores operate under the Dillard’s name.
The merchandise mix at Dillard’s is similar to items sold at Boston Store and Macy’s, Seesel said.
“They’re nice stores,” he said. “They’re well-run.”
Women’s clothing accounted for 24 percent of Dillard’s sales during the first quarter, according to an SEC filing.
Other key segments include men’s clothing and accessories, 16 percent of sales; shoes, 16 percent; women’s accessories and lingerie, 14 percent; cosmetics, 14 percent; junior and children’s clothing, 10 percent; and home furniture, 3 percent.
Family leadership continues
Dillard’s was founded in Nashville, Ark., in 1938 by William T. Dillard.
It became a publicly traded company in 1966 and began rapidly expanding in the 1970s by entering new suburban shopping malls, according to a company history.
Dillard’s has continued growing in recent years, including an acquisition in 2001 of 12 department stores from defunct operators Montgomery Ward and ZCMI.
William T. Dillard II, the company’s chairman and chief executive officer, is the founder’s son.
Dillard’s would be the third full-service department store chain to enter the Milwaukee area in recent years.
Seattle-based Nordstrom Inc. opened a store at Mayfair in 2015, while Davenport, Iowa-based Von Maur opened at The Corners of Brookfield mixed-use development in 2017.
Meanwhile, the last Milwaukee-area Sears store closed at Brookfield Square in March.
Karen Pilarski of Now News Group contributed to this report.
Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram, Twitter and Facebook.