Nordstrom to close 16 stores post COVID

[Super S]

In some ways Clackamas surprises me a little. While I do feel for various reasons that Clackamas Town Center seems to be starting a decline of sorts, and has a vacant Sears, it is still in a good location near I-205, and is the only Nordstrom on the east side. But then again Clackamas likely doesn't fit the demographics Nordstrom wants, plus there are still 2 anchor spaces occupied by Macy's. (the former Meier & Frank and the former Montgomery Ward)

This seems like it might be a good opportunity for Dillard's to enter the market or for Kohl's to move from the ex-Mervyn's across the street though depending on the square footage.

Clackamas is in a weird position. If they move to fill anchor spaces quickly it could remain viable, but seeing how Lloyd Center has declined (and the Nordstrom space is STILL empty, along with Sears and Marshalls) and how Mall 205 is struggling, I am not sure what the future holds for Clackamas. The remaining large anchors (the two Macy's stores plus JCPenney)aren't exactly thriving. This is also a time when nearly all malls in the Portland area have at least one vacant large anchor simultaneously.

[babs]

In some ways Clackamas surprises me a little. While I do feel for various reasons that Clackamas Town Center seems to be starting a decline of sorts, and has a vacant Sears, it is still in a good location near I-205, and is the only Nordstrom on the east side. But then again Clackamas likely doesn't fit the demographics Nordstrom wants, plus there are still 2 anchor spaces occupied by Macy's. (the former Meier & Frank and the former Montgomery Ward)

This seems like it might be a good opportunity for Dillard's to enter the market or for Kohl's to move from the ex-Mervyn's across the street though depending on the square footage.

Clackamas is in a weird position. If they move to fill anchor spaces quickly it could remain viable, but seeing how Lloyd Center has declined (and the Nordstrom space is STILL empty, along with Sears and Marshalls) and how Mall 205 is struggling, I am not sure what the future holds for Clackamas. The remaining large anchors (the two Macy's stores plus JCPenney)aren't exactly thriving. This is also a time when nearly all malls in the Portland area have at least one vacant large anchor simultaneously.

There's zero chance Kohl's move across the street into the mall and I just don't see Dillards coming into the market. The most likely scenario is probably more like Washington Square had planned for replacing Sears. They had submitted plans to the city where the Sears building comes down and is replace by two buildings. One with office space, WeWorks or similiar, and the other building would have either a movie theater or bowling ally, both buildings with restaurants on the ground level. At the end of the walk way would be an apartment complex and a second apartment complex where the auto center is. However Macerich has placed all projects on hold due to the virus.

I'm not sure how much Brookfield has available to invest in its properties right now but over the long term, I see housing, office, restaurants and entertainment functions taking over the space, especially with it being on the MAX line.

On a side note, I think what made Clackamas Town Center unappealing to Nordstrom is the lack of related high end tenants. No William Sonoma, Pottery Barn, Apple, Tesla, Kiehl's, Lululemon, etc. The mall is very mid market and probably wasn't attracting the right shopper.

[storewanderer]

I wonder if there is a place for Dillard's in the Pacific Northwest. I am really not sure. But Dillard's is present in ID and MT, so it would not be a giant reach geographically.

Still I would not expect to see them with more than a couple stores in OR at the most.

I think we would have to see a literal shortage of department stores for it to make sense. Like, too many Macy's closures combined with a surprising volume of JCP closures. The Nordstrom closures could give them some nice buildings. Dillard's owns the majority of its buildings... so not sure how this fits.

[buckguy]

I wonder if there is a place for Dillard's in the Pacific Northwest. I am really not sure. But Dillard's is present in ID and MT, so it would not be a giant reach geographically.

Still I would not expect to see them with more than a couple stores in OR at the most.

I think we would have to see a literal shortage of department stores for it to make sense. Like, too many Macy's closures combined with a surprising volume of JCP closures. The Nordstrom closures could give them some nice buildings. Dillard's owns the majority of its buildings... so not sure how this fits.

I'd be surprised if Dillard added stores anywhere. They continue to pay a cash dividend despite racking up large losses. Their sales have been flat, at best, after years of often steep declines. The company continues to buy back stock which only benefits the Dillard family by inflating the price---essentially they treat the business in ways that are analogous to private equity---sucking out the cash, making minimal investment in the stores and probably accepting this is a mature business that will get cashed-in once they no longer feel they are able to get enough money from it. The other issue with them is that they have not been very successful outside of the sunbelt and closed numerous stores in their more northerly acquisitions.

They were rumored to be interested in buying stores Milwaukee (exactly the kind of place where they've failed) a few years ago but never followed through. They've opened a couple new stores in the last year but all were in existing markets.

[Super S]

I wonder if there is a place for Dillard's in the Pacific Northwest. I am really not sure. But Dillard's is present in ID and MT, so it would not be a giant reach geographically.

Still I would not expect to see them with more than a couple stores in OR at the most.

I think we would have to see a literal shortage of department stores for it to make sense. Like, too many Macy's closures combined with a surprising volume of JCP closures. The Nordstrom closures could give them some nice buildings. Dillard's owns the majority of its buildings... so not sure how this fits.

With Macy's closing some locations over the last few years (plus alienating some shoppers that were loyal to the various local brands they took over), plus the uncertain future of JCPenney, plus many vacant Sears spaces in malls across America, we are already seeing a shortage of department stores. (and many people aren't really missing some of them) I have never been in to a Dillard's, but if they can bring something different to a market it may make sense. As for Kohl's, I know they aren't typically a mall store but they have been known to move into vacant mall buildings. I do agree Clackamas is not likely for them.

To be honest though, the current Coronavirus situation has thrown a set of monkey wrenches into the plans of nearly every retailer.

[buckguy]

Dillard brings nothing to the table. The stores have zero service. The merchandise is heavily weighted toward house brand merchandise of no particular distinction. They began their nationwide growth by buying upper middle brow stores, and although they have kept some of that merchandise, they really don't have much that's different from Macy's, even in their few "flagship" locations. They used to fill empty mall spaces with separate home or men's stores but have phased-out those kinds of operations. They used to be notable for everyday low prices rather than promotions, but they've been doing more with markdowns over the last couple years. In their early days, Wall Street was enamored with their central purchasing, but beyond a very small number of "flagship stores" the selection is if anything more monotonous than other chains.

[storewanderer]

Dillard's entered Reno with a new build store 15 or so years ago. The store has picked up traffic quite well over the years, but it was not doing much business initially. They have significantly hurt the Reno Macy's, which has been on an ongoing decline over the years, particularly noticeable the past 3 or so years. Dillard's store gets busier and busier, Macy's is more and more "steady" at best. About 5 years ago I was thinking the Dillard's may be closing as it was getting quite empty of merchandise in there, but a new store manager was put into place and it seems like they gave the store another chance and restocked it. At the same time that was happening, Macy's significantly downscaled its store taking out branded items, cutting department sizes, and adding more private labels, while Dillard's restocked store was noticeably better and customers took notice.

Dillard's does not do much promotion beyond clearance. Most items sell at full retail. They do not fill the store up with junk to then have a bunch of promotions. They sell better items, they do not sell junk. I have never seen them issue a coupon for anything. There is usually a good amount of clearance product available and the quality of their private label men's clothing is excellent when you can get it at 65% off plus every couple of months they do an extra 30%, 40%, or 50% off the clearance items which is a great deal.

Dillard's mens clothing area used to have a decent split between branded and private label but at this point it feels like it is about 75% private label and 25% branded.

Dillard's womens clothing area is a mixture of brands and private label (probably about 60% private label and 40% branded) in this store. Some brands have come and gone.

Dillard's shoe areas seem to skew much more toward branded product than private label. Women's shoes and women's handbags are by far the strongest departments in the Reno Dillard's. For some reason the Reno Macy's has downsized both of those departments in recent years (handbags multiple times). No clue why.

It is funny buckguy mentions Dillard's doing home stores and men's stores in dead store spaces which I've never seen before, but that is what Macy's does here in Reno. The former Liberty House anchor space is one floor of men's and a floor of mattresses/home items. Then across the street from the mall in a former Pak N Save and Phar Mor is a big huge Macy's "furniture gallery." I have no clue why about two years ago Macy's decided to move mattresses out of the "furniture gallery" and into the mall store and cut about 40% of the SKUs in the home department in the process, but they did, and that floor is a ghost town now; it used to be very busy. Similar to their odd decision to (twice) cut the size of the women's handbags department first to add an "online pick up" area then to add a "watch repair" - Macy's has made a lot of really poor space allocation decisions in its Reno stores. Macy's also chopped the size of its women's big and tall area to add a "last act" clearance area and chopped the size of its kid's department to add a "backstage" clearance area so about 30% of the second floor of the women's Macy's is now these clearance areas. All curious moves.

The customer service at Dillard's is significantly better than Macy's; there are still cash registers in every area and on a typical day about half of them are staffed, at night maybe 1/4 are staffed; (for instance in mens, they have cash registers in men's shoes, men's suits, men's big and tall, men's Tommy, jeans, young men's, some other men's clothing area, men's accessories, and men's fragrances). During a clearance sale every register will be staffed.

Where I think Dillard's can come in in the NW is in markets that were not "upscale" enough for Nordstrom, but do command something better than a Macy's. Macy's has really missed the mark in the Pacific Northwest. They have not merchandised their stores properly, the physical condition of the stores is not great, and in general it seems like they took what was a successful chain under May (Meier and Frank), invested nothing in the stores, and expected somehow just because they were "Macy's" that people would flock in.

I do think there may be space for a couple locations in OR with the Nordstrom closures. Dillard's can run a store that is a far step up from the usual Macy's (and those OR/WA Macy's are poor quality stores- not as good as the CA Macy's Stores) if they try. Given Nordstrom continues to have a pretty good presence in WA and it is their home market I am not sure there is much space for them there. Maybe in Spokane.

[babs]

Dillard's entered Reno with a new build store 15 or so years ago. The store has picked up traffic quite well over the years, but it was not doing much business initially. They have significantly hurt the Reno Macy's, which has been on an ongoing decline over the years, particularly noticeable the past 3 or so years. Dillard's store gets busier and busier, Macy's is more and more "steady" at best. About 5 years ago I was thinking the Dillard's may be closing as it was getting quite empty of merchandise in there, but a new store manager was put into place and it seems like they gave the store another chance and restocked it. At the same time that was happening, Macy's significantly downscaled its store taking out branded items, cutting department sizes, and adding more private labels, while Dillard's restocked store was noticeably better and customers took notice.

Dillard's does not do much promotion beyond clearance. Most items sell at full retail. They do not fill the store up with junk to then have a bunch of promotions. They sell better items, they do not sell junk. I have never seen them issue a coupon for anything. There is usually a good amount of clearance product available and the quality of their private label men's clothing is excellent when you can get it at 65% off plus every couple of months they do an extra 30%, 40%, or 50% off the clearance items which is a great deal.

Dillard's mens clothing area used to have a decent split between branded and private label but at this point it feels like it is about 75% private label and 25% branded.

Dillard's womens clothing area is a mixture of brands and private label (probably about 60% private label and 40% branded) in this store. Some brands have come and gone.

Dillard's shoe areas seem to skew much more toward branded product than private label. Women's shoes and women's handbags are by far the strongest departments in the Reno Dillard's. For some reason the Reno Macy's has downsized both of those departments in recent years (handbags multiple times). No clue why.

It is funny buckguy mentions Dillard's doing home stores and men's stores in dead store spaces which I've never seen before, but that is what Macy's does here in Reno. The former Liberty House anchor space is one floor of men's and a floor of mattresses/home items. Then across the street from the mall in a former Pak N Save and Phar Mor is a big huge Macy's "furniture gallery." I have no clue why about two years ago Macy's decided to move mattresses out of the "furniture gallery" and into the mall store and cut about 40% of the SKUs in the home department in the process, but they did, and that floor is a ghost town now; it used to be very busy. Similar to their odd decision to (twice) cut the size of the women's handbags department first to add an "online pick up" area then to add a "watch repair" - Macy's has made a lot of really poor space allocation decisions in its Reno stores. Macy's also chopped the size of its women's big and tall area to add a "last act" clearance area and chopped the size of its kid's department to add a "backstage" clearance area so about 30% of the second floor of the women's Macy's is now these clearance areas. All curious moves.

The customer service at Dillard's is significantly better than Macy's; there are still cash registers in every area and on a typical day about half of them are staffed, at night maybe 1/4 are staffed; (for instance in mens, they have cash registers in men's shoes, men's suits, men's big and tall, men's Tommy, jeans, young men's, some other men's clothing area, men's accessories, and men's fragrances). During a clearance sale every register will be staffed.

Where I think Dillard's can come in in the NW is in markets that were not "upscale" enough for Nordstrom, but do command something better than a Macy's. Macy's has really missed the mark in the Pacific Northwest. They have not merchandised their stores properly, the physical condition of the stores is not great, and in general it seems like they took what was a successful chain under May (Meier and Frank), invested nothing in the stores, and expected somehow just because they were "Macy's" that people would flock in.

I do think there may be space for a couple locations in OR with the Nordstrom closures. Dillard's can run a store that is a far step up from the usual Macy's (and those OR/WA Macy's are poor quality stores- not as good as the CA Macy's Stores) if they try. Given Nordstrom continues to have a pretty good presence in WA and it is their home market I am not sure there is much space for them there. Maybe in Spokane.

Primark would be a really good fit for Clackamas Town Center. I've been to several locations in Europe, they are department store anchors in malls and are always packed. Decent clothes at really low prices. I think they would do better than Dillards.

[storewanderer]

Primark would be a really good fit for Clackamas Town Center. I've been to several locations in Europe, they are department store anchors in malls and are always packed. Decent clothes at really low prices. I think they would do better than Dillards.

Primark and Dillards are catering to two very different customers. Primark is catering to a younger shopper on a budget. Primark looks like a Forever 21 that sells a larger mix of items.

Primark's US Stores do not carry nearly as large of a product mix as the ones in Europe carry either. I think Primark's US Stores are all well under 100,000 square feet (are they even 50,000 square feet?)? Compared to the usual mall anchor space that is 150,000 square feet+.

With that said Primark has had a lot of opportunities to do a larger scale expansion in the US and so far I don't think they've even hit 12 stores. In about six months here the malls will be begging them to come with all the anchor spaces that are about to become vacant. Thing is, I am thinking fast fashion is "out" and that is why out west we have Forever 21 who was once very strong, who has practically folded; customers just flat abandoned them. I don't think H&M is doing that great either in the US.

I would argue there is room for both Primark and Dillards since they both cater to a very different customer.

Fast fashion was thought to be the future of retail. It was great for the disposable society, buy something and wear it a few times and then dump it and come buy something new. Terrible for the environment and horribly wasteful. But it creates jobs to keep making these junk clothes and forces the customer to visit the store more often so there is a win on impulse purchase opportunities. Problem is customers grow up and start to want "nicer" things and abandon fast fashion.

Dillards is catering to an older Conservative shopper who is willing to pay a higher price for "nice" clothing. Or a younger shopper who needs more professional looking clothing to wear to work. It is not a store for trendy clothing; it is a store for nicer clothing. The typical Dillards (or Macys, or even JCP) customer would be completely turned off by the atmosphere of the Primark Store. Primark as a fast fashion chain is a store for trendy clothing.

[buckguy]

The clearance merchandise is a function of their gradually closing the clearance centers which were conversions of underperforming stores. They're doing more markdowns than in the past and they distribute coupons online. I haven't bought anything from them recently (like I said nothing of any particular distinction) but do like to do amateur anthropology when I'm in their area. The service really tends to be non-existent even in their more upscale stores. The displays vary a lot from disheveled to fairly neat---they seem to get better for awhile after they update stores (which they've been slow to do). OTOH, they seem to have less merchandise on the floor than in the past. The clientele is older which is probably part of their downward spiral. They also don't attract families, which is something that JCPenney still manages to do.

The real issues with them are that the owners are sucking cash out of the chain and it's losing money, so it's pretty unlikely they will move anywhere.