ClownLoach wrote: ↑March 3rd, 2024, 1:26 pm
Jeff wrote: ↑March 3rd, 2024, 10:28 am
storewanderer wrote: ↑March 2nd, 2024, 12:16 am. I may like Dillard's better and they have a decent store count but at the end of the day Dillard's does little marketing and otherwise does little to draw people into the mall and engage them.
I really wish Dillards would expand into Los Angeles. The Palmdale store is always clean, organized and the staff top notch. I rather travel an hour to that store than shop any of the Macys here. They just don't have the name here as Macys.
The problem is that outside of small local markets like Palmdale there is little awareness in LA. They would have to spend a fortune on advertising in the 2nd most expensive ad market in the US (1st being NY). They would have to open dozens of stores to offset just the advertising costs... And don't forget the incredible expense of construction and remodeling today, assuming they can find quality former JCP, Macy's, Sears, or Nordstrom buildings available in quality malls that aren't going to be leveled in the next few years. They would need at least twenty stores to offset the advertising costs and still expect to lose money for a decade. You're talking about a multi billion dollar investment just to get into the core LA/OC/IE/Ventura/SB market. If it doesn't go perfectly it bankrupts the entire chain and it liquidates. They aren't going to come to LA or any other high cost of operation market. Macy's successfully squeezed them out in the 90's and prevented their expansion. What I would agree on is that if they had been able to overcome the blockade on space I think the malls with Macy's and Dillards (and either a JCP or Nordstrom depending on clientele) would greatly outperform those without a Dillards. I bet Macy's regrets this decision today.
Dillards has little to no debt and an in-house construction company with mostly owned real estate. So any projects they do are handled by their in house construction company.
If they were to enter CA they would need to acquire the real estate. I am thinking with the various ideas on the table to redevelop malls into housing and other uses it may be difficult to pick up decent anchor spots.
Macy's California/Macy's West was very very predatory in its real estate practices in the 90's and 00's with the CHH purchase and Bullocks then with May. Macy's West was a far more upscale operation than most of Macy's historically in the 90's/prior then it started blurring after the May purchase (in my opinion the quality of the Macy's West operation took a nosedive after that). They did everything they could from a real estate perspective to keep serious competitors away from them and as you note this was at the great expense of many malls today. They also "chose" malls to "kill" by closing the the CHH store in a given mall and sending customers to the "other mall nearby" with the original Macy's (or two) in it. Then of course they would not let someone like Dillard's open at that "other mall nearby" and play the mall owners - look- you let Dillard's in, we will close at your mall and move to that other mall (the dead one where they closed the CHH store)... they did the closing CHH stores thing to malls in decline; Park Lake in Reno, Florin in Sacramento, etc. They let a few Gottschalks slip in but Gottschalks was not something they saw as a serious competitor. For whatever reason they were a lot more scared of Dillard's than Gottschalks- I keep bringing up the locations they "let" Dillards get in CA- Palmdale, El Centro, Stockton. These are not towns with a great reputation and I'm sure the arrogant Macy's West management laughed at the time that Dillards even went through with the stores in those locations; but look, those stores are still open today. I kind of thought it was a joke too until I went and saw those Dillards stores over the years and saw strong operations with good employees and customers who seemed happy shopping there. My understanding is the store in Stockton does quite well; not sure how the other two do.
I'd like to see Dillards try a couple more well placed stores in SoCal, I think they'd get a lot of free press/attention out of the development of the stores and enough curious customers to show up for a grand opening, their typical style is not to do much advertising so I'm not sure how that would work long term on retention. Another way they keep costs down is by not advertising much. They'll never penetrate the market but a couple more scattered stores would be useful in my opinion.
Other option is add stores in places more similar to their current stores; Bakersfield, Modesto, Fresno... buying for those stores may be more in line with the buying they do with AZ/Las Vegas anyway...