FRISCO, TX—Declining retail sales in what has been a high-growth segment prompts a closer look at the department store off-price sector. Possible strategy changes including the distances retailers will put between off-price and full-line stores, as well as factors that could be contributing to falling sales were outlined in a recent report by Kroll Bond Rating Agency/KBRA.
Historically, the underlying assertion was that department stores wanted to ensure that off-price distribution channels didn't compete directly with full-line business locations. This was intended to limit off-price stores cannibalizing sales from full-line offerings and avoid the dilution of brand identity.
However, with department stores struggling, fewer off-price stores opening and different location strategies emerging, sales siphoning could be taking place. Some retailers observed that there could be benefits by positioning off-price and full-line offerings in closer proximity.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
