Tony Spring Makes Case For Growth at Bloomingdale’s
The ceo sees the potential to “surgically” expand with additional full-line stores and outlets, and digital sales.
Amid all the retail brick-and-mortar downsizing, consider Bloomingdale’s an outsider.
With a full-line store opened in Norwalk, Conn., on Nov. 14 and another coming up next year in San Jose, Calif., there’s a view at the $3 billion, 35-unit Bloomingdale’s toward adding department stores as well as outlets.
“Unlike others, we still have opportunities for expansion,” said Tony Spring, Bloomingdale’s chairman and chief executive officer. “Connecticut is another step in looking at the portfolio and evaluating market opportunities for growth.”
Texas, Washington, Michigan and Arizona, where there are no Bloomingdale’s, as well as the Boston
area, where Bloomingdale’s has only one store in Chestnut Hill, Mass., would be on the radar. In north Miami, Bal Harbour Shops is expanding and for years pursued Bloomingdale’s. Barneys had planned to move into Bal Harbour Shops, until going bankrupt last August and getting sold, which poses an opportunity.
“Today at 35 full-line stores, there is opportunity for Bloomingdale’s to surgically expand compared to its competitive set which is really going into more of an editing mode,” Spring said. “It feels like this is a moment for Bloomingdale’s to capitalize on the unique time in the market. We don’t have too many stores. We have a younger customer. Some competitors are struggling.”
Recently, two Bloomingdale’s outlets opened, bringing the outlet count to 19. “We have more on the docket,” Spring said. “We have seen people open outlets for the sake of door count. I want to find the right locations.”
Overseas, no new stores have been announced, though Spring said, “There is opportunity in the future for additional international growth. It’s got to be the right partner and the right market.” Bloomingdale’s operates two licensed stores in Dubai and Kuwait in partnership with Al Tayer.
Last week, Macy’s Inc., the parent company of Bloomingdale’s, Macy’s and Bluemercury, reported weak third-quarter corporate results and guided 2019 sales and earnings downward, though specifics on Bloomingdale’s are not broken out.
The report sparked renewed concerns from analysts and pundits about the longterm viability of department stores amid thinning traffic at many malls, e-commerce migration, and not enough innovation.
“We are all challenged to make sure we are reinventing,” Spring added. “A new store like Norwalk, it’s got to resonate with this Connecticut community and have the DNA of Bloomingdale’s.”
Spring won’t discuss Bloomingdale’s performance, though one source close to the business said, “Things are not bad and things are not gangbusters.”
In an exclusive interview with WWD, Spring presented a realistic outlook on the future and gave the case for department stores. He discussed everything from Bloomingdale’s new Norwalk store and localizing the appeal to honing the brand DNA and increasing food and beverage offerings and how customers crave the yogurt served at Forty Carrots inside Bloomingdale’s.
“Don’t mistake my point. I love the digital business,” Spring said. “I love the growth in digital and we are going to be bigger and we are going to better at it. That being said, we are in a tactile business.
You try things on. You touch things. You converse with other people. You match things together. You can’t search online for what you have never heard of before. And you think something popping up online for one second is discovery? You can go to the Disney app or you can go to Disney World. There is just only so much on a small screen that you can do to create an emotional business.”
Discovery, he said, is integral to the department store experience. “We know that a third of the purchases in store are still impulse, that you still have a sense of discovery that occurs when you go through a store. That’s the visual impact. That’s the animation of special events. That’s the humanity of salesmanship.”
Replenishment items, as a percent of the overall volume generated at stores, will shrink due to the convenience of the Internet. Yet Spring suggested sales on the Internet will only grow so much, citing a UBS report predicting that the Internet will account for 30 percent of clothing and footwear sales by 2023. He won’t disclose digital sales as a percentage of Bloomingdale’s total business, though it’s said to be less than at Neiman Marcus or Nordstrom, which report around one-third.
Aside from the store and digital channels, Bloomingdale’s sees growth via private brands, particularly its 20-yearold Aqua label, by adding stylists to the selling floors for greater service; building a niche fragrance businesses with brands like Creed, MFK, and Frank Gore Jokinen; adding F&B, and through an ongoing program of store renovations. Stores in Riverside Square in Hackensack, N. J., on Michigan Avenue in Chicago, and in Roosevelt Field on Long Island are undergoing renovations and updates, and work is planned for the South Coast Plaza store in Costa Mesa, Calif.
“Because we have is a smaller portfolio, we have the opportunity to keep it updated and feeling modern,” Spring said.
Importantly, it’s a matter of honing the DNA — building upon what makes Bloomingdale’s Bloomingdale’s — its standout advanced contemporary fashion, designer fashion, luxury center core, premium denim, beauty, and upscale home businesses, as well as its culture of tapping of-the-moment pop culture stars, styles and trends of music, film and theater, for marketing and fashion campaigns.
Zendaya, before she collaborated with Tommy Hilfiger, did a collaboration with Aqua. “You see (celebrities) come here first before they take off in fashion,” ►