Belk Department Stores: Why It'll Take More than a New Look to Nab Market Share
The biggest change to roll out of the southeastern retail scene in a while is the re-branding of Belk department stores. Company management is betting that a new logo, tagline and advertising will be the key that snags more market share for the 100+ year old chain. If only it were that simple.
Branding is an unquestionably big deal. However, it takes more than a font revision and a new catchphrase to coax reluctant shoppers to take a second look at a tired retailer. Belk's going with the line, "Modern. Southern. Style." That's fine. But where's the modern? (Can't help but notice Belk's B bears a striking resemblance to Bloomingdale's initial).
CEO Tim Belk told WWD, "The focus in the next two to three years will be on organic growth, getting our stores to be more productive. If you look a little further than that, you will see new store growth in the next two or three years." That isn't a new concept; it's a cornerstone of smart retail management which Belk has successfully employed in the past.
Charlotte, N.C.-based Belk is the largest privately-owned department store in the country, with 306 locations in 16 Southern states, thanks in part to a pre-recession shopping spree in which the company acquired Proffitt's, McRae's and Parisian, which pumped up revenues by $1 billion. Comps continue to gain, the most recent increase was 5.3 percent in the second quarter. Belk's also maintained a comfortable amount of cash flow throughout the downturn, enough to allow it to make a sizeable investment (think $70 million) in these cosmetic improvements.
Beyond the visual branding, Belk's team also plans to beef up several assortments including denim, jewelry and shoes (yawn), as well as implement remodeling (60 stores in 3 years - yay!) and increase merchandising and planning staff (best bet).
Belk would do well to focus on creating future assortments (beyond those targeted above) that fill a hole in the market if the company really wants to put its money where its mouth is. A savvy merchandising staff (preferably poached from some of the more successful chain retailers) could take the department store to a whole new level. Think Banana Republic's (GPS) transformation from utilitarian safari gear peddler to business/casual destination of choice.
Team Belk needs to take a hard look at what's missing from its own sales floor â€" and its competitors around the region (hint: stylish plus sizes, more exclusive brands like Free People (URBN), competitively priced formalwear for men and women, accessories such as scarves and handbags) and get on sourcing those, effective immediately.
The entire effort is slated to begin this week and continue over the next 18 months. Stay tuned.
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