Less than two weeks ago, retail legend Les Wexner called department stores “irrelevant.” This week, JCPenney CEO Myron Ullman says his troubled company may post positive same-store sales comps for the first time in ages.
Contradiction? Wexner made his remarks at his company's recent investor conference presentation. In addition to noting the expansion of La Senza into the United States and the growth of Victoria's Secret, Pink and Bath & Body Works overseas, Wexner just had to dismiss the larger format stores—and even the malls that house his own shops.
“The average Apple Store probably draws more traffic to a shopping center than any department store does,” he said. “And it's probably healthier traffic in terms of its age and what that traffic would mean in terms of opportunity for us.”
Restaurants and the actual experience of shopping are more of an attraction, he continued, specifically citing Easton Town Center in Columbus, the pioneering open-air center Limited Brands developed with Georgetown Co. and Steiner + Associates. Yet look at the tenant list and there they are: anchors Macy's and Nordstrom.
“I'm not dissing on anyone, but I don't find that at this point in my young life or probably in yours that there's a great reason to go to a department store or to a shopping center to buy a pair of jeans because if you found a pair of jeans like, you could buy them online,” the 76-year-old Wexner said.
Really? With all due respect, where are we trying on those jeans so we'll know they fit? From more than one brand, each with a different cut? At least occasionally, it's at a department store. Yes, a skittish consumer has caused Macy's to lower its 2013 same-store sales estimates from an increase of 3.5 percent to 2 percent to 2.9 percent. But for quite a while during the recession and recovery, department store sales were leading the various indices while L Brands was pretty much alone in posting gains in the specialty apparel sector.
JCPenney reported that comp sales declines slowed in December, and may in fact post positive same-store sales in the third quarter, according to Reuters' coverage of WWD's Apparel Summit.
So are department stores irrelevant? Or is Penney's improvement a sign of just the opposite?
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