New acquisition by Belk

[DigitalSky]

I figure in a lot of these markets where we see duplicate stores, Dillard's will get a lot of them.

[mallguy]

So Parisian has 4.6 million sf of store space being sold, with revenues of $723 million. That's $157 per square foot. Poor!

[memphian]

SAKS was looking to unload Parisian. My guess is that Belk was the only offer. I would have rather seen Parisian sold off in the same manner as Lord and Taylor where it could have been given a chance for life. Parisian has in the past been called "the Bloomingdale's of the South." I am not sure that today's Parisian could be called that as it more resembles a mix of Lord and Taylor and Nordstrom.

[StevenRocks]

Belk is well-connected with vendors and usually gets the first crack at exclusive brands in their markets. Cosmetics, fragrances, china, crystal and silver are always above average; apparel and shoes tend to be at least decent, if not excellent. The only real disadvatage Belk has is with home goods. Domestics and housewares tend to be a little weak.

[Rufus]

I really think Belk will take care of the more upscale Parisian locations, like in the Summit and Phipps Plaza. If they want to improve their image as an upper-middle-class department store they'll want to take care of their profitable locations. I can see the Summit and Phipps Plaza, and maybe some Parisians in Tennessee being changed into the upscale forms of Belk like in Raleigh and Southpark, with a Southpark-like store at Phipps Plaza. The Crabtree Valley Belks is the second largest, and considered a flagship. they carry virtually the same merchandise as the SP, missing only names like Armani, Burberry, Chanel, and MaxMara, but they are looking to expand their merchandise line to be near on par with SP. Belk recently has been trying to have more upscale locations, and Parisians buyout was just a lucky bet.

[mallguy]

What about the Parisians in Charleston, Columbia, etc.? The Columbia store is kind of run down but still has decent merchandise- kind of like a typical mall Lord & Taylor; the Charleston one is pretty nice. Any bets on what happens to them?

[atlrvr]

I don't see why they don't all become Belk stores except for overlapping locations, the exception being the stores located in the Midwest in non-contiguous states.

What everyone seems to be missing is that Belk has a very successful business model that appropriately aligns merchandise with the targeted consumer. They will operate each store on a market-by-market basis, and I suspect we will see very few fail, much to people's chagrin.

There is a reason that Belk succeeds, while other chains fail, and it's not just luck, or whims of each chain's management. Everyone seems to think they somehow know better than Belk, yet we are talking about a chain of ~270 stores absorbing less than 40 stores. I'd say it's a safe bet that if there wasn't a specific plan for the acquisition, then they would save their time and money.

[J0e]

My question is what will Belk do with the newly acquired stores that have both the Belk & Parisian nameplates (Tennessee malls such as Hamiliton Place [Chattanooga] & West Town Mall [Knoxville]). The reconverted Belk (Old Proffitt's) @ West Town is fairly impressive. They brought in an assortment of different merchandise like Kiehl's. I was very surprised when visiting from Nashville.

Will they split them into two stores selling different merchandise - one catering to women & children and the other men & and say housewares? Or will they get rid of them? But to whom would they sell them? Both of those malls already have Dillard's. LOL.

[DruidCity]

I honestly don't see the difference between Belk and Parisians in terms of merchandise mix.

From an Alabama perspective, Parisian's was clearly marketed within the Saks group as a "higher level" store than McRae's/Proffitt's, rather like Cadillac vs Chevrolet within General Motors .

To those in areas where the Belk name is not well-established, our "first impression" of that chain comes from Belk's entry into the market through the acquisition of McRae's/Proffitt's.

[memphian]

The Parisian at Cool Springs (Nashville) has traditionally been one of the top-performing stores. If they lux it out then it would work. They'll have to do that from the get-go though. I'd almost suggest NOT having housewares so they can focus on high fashion (unless they're willing to add another floor to the store like Dillard's Rivergate did). Luckily, the Dillard's in Nashville are typically a step above the rest of the chain which make competition tougher.

[rockhilljames]

I don't see why they don't all become Belk stores except for overlapping locations, the exception being the stores located in the Midwest in non-contiguous states.

What everyone seems to be missing is that Belk has a very successful business model that appropriately aligns merchandise with the targeted consumer. They will operate each store on a market-by-market basis, and I suspect we will see very few fail, much to people's chagrin.

There is a reason that Belk succeeds, while other chains fail, and it's not just luck, or whims of each chain's management. Everyone seems to think they somehow know better than Belk, yet we are talking about a chain of ~270 stores absorbing less than 40 stores. I'd say it's a safe bet that if there wasn't a specific plan for the acquisition, then they would save their time and money.

Right on the frappin' nose!

[NCMike1981]

I'm not sure if Belk's various levels of quality will eventually help or hurt the chain in the long run. I mean on the one hand in NC we have small town stores like downtown Fuquay Varina, the Garner Belk, located by Wal-Mart and a former Winn Dixie which was apparantely labeled a "Tag" store or something years ago as a test concept for Belk. I think it was some form or Outlet or Ross/Marshalls type store that became Belk officially in the mid-late '90's, and numerous other small town stores like Siler City located beside a Roses that I hear are borderline dumpy. Then on the other hand there are the big Belks like Southpark and Crabtree and numerous other big city stores which are quite upscale. Could the various quality of their stores end up hurting them, sort of as a loss of identity, or better help them compete in their individual markets?

[mallguy]

I'm not sure if Belk's various levels of quality will eventually help or hurt the chain in the long run. I mean on the one hand in NC we have small town stores like downtown Fuquay Varina, the Garner Belk, located by Wal-Mart and a former Winn Dixie which was apparantely labeled a "Tag" store or something years ago as a test concept for Belk. I think it was some form or Outlet or Ross/Marshalls type store that became Belk officially in the mid-late '90's, and numerous other small town stores like Siler City located beside a Roses that I hear are borderline dumpy. Then on the other hand there are the big Belks like Southpark and Crabtree and numerous other big city stores which are quite upscale. Could the various quality of their stores end up hurting them, sort of as a loss of identity, or better help them compete in their individual markets?

I think that brand identity is very important and confusion from having a brand represent multiple types of products can be wrong. Look at airlines- United runs Ted (cheap all-coach flights), p.s. (high-end transcons- relatively luxurious) and mainline United, and each, for frequent flyers, has a clearly defined image. Federated has Macy's and Bloomingdale's. There is some varying degree of quality among some brands as has been pointed out (like high-end Nordstrom vs. less-high-end stores) but Nordstrom, Saks and Neiman Marcus, in my view, have much less quality variation between stores than Belk does.

Another reason to keep Parisian alive: based on my calculations, ($2.97B of revenue on 20.4M sf of space, in Belk's most recent 10-K), Belk has sales/sf of $146; that is lower than Parisian's.

[memphian]

Here is a link from a Nashville Paper:

http://www.tennessean.com/apps/pbcs.dll/ar...ESS01/608030381

[shrek05]

My question is what will Belk do with the newly acquired stores that have both the Belk & Parisian nameplates (Tennessee malls such as Hamiliton Place [Chattanooga]& West Town Mall [Knoxville]). The reconverted Belk (Old Proffitt's) @ West Town is fairly impressive. They brought in an assortment of different merchandise like Kiehl's. I was very surprised when visiting from Nashville.

Will they split them into two stores selling different merchandise - one catering to women & children and the other men & and say housewares? Or will they get rid of them? But to whom would they sell them? Both of those malls already have Dillard's. LOL

Probably the same as what Federated did after the Federated and May Co. merger. All locations with a Macys and a May corporation tag had one close and at some locations converted into Bloomingdales (very few did this). THey will probably get rid of one store to like JC Penney or some sort.

I think that brand identity is very important and confusion from having a brand represent multiple types of products can be wrong.

Completely agree. Macy's and Bloomingdale's was the right path (keeping both names). Belk should have kept Parisian and made their top-notch Belk stores into Parisians and boosted the luxury items at those specifics stores. Having one name-brand cover all these markets is not going to work. Burlington Coat Factory tried that at many locations and failed. Public perception of the brand will deter them, no matter how hard they try to change. Even if the Belk at Phipps sells upscale items, many will still probably stay away and go to Neimans, Bloomingdales or Saks instead.

Nordstrom, Saks and Neiman Marcus, in my view, have much less quality variation between stores than Belk does.

Perhaps in the brand name, but the difference between a low Belks and high Belk may be a shirt for 20 dollars compared to a shirt for 200 at a nice Belks whereas at the worst Saks vs best Saks it would be a 200 shirt at a poorly stocked store to a 4000 dollar shirt at a flagship.

I mean both items at the Saks are seen as luxury, but the cost is much different.

[Rufus]

I really dont think it matters if the stores are renamed into a parisian nameplate or belk, what should matter is the quality. i think many of us are looking too much into the name of the stores rather than what the stores pride themselves on, which is quality and customer satisfaction. it is too much trouble for belk to create an upscale brand name store while trying to improve its image as a slightly more upscale destination. in my opinion if belk tried creating a separate entity it will result in another Saks malfunction. Why do you think Saks got rid of so many department stores, it had to much to deal with while trying to focus on one store brand.

[turbocraig]

Here is a link from a Nashville Paper:

http://www.tennessean.com/apps/pbcs.dll/ar...ESS01/608030381

Oh my. Those comparison pics of Parisian vs Belk don't paint a pretty picture, do they? Is that what a typical Belk looks like outside of CLT? I must be real sheltered, because my exposure to Belk is at SouthPark (or every once in a great while Carolina Place) and they certainly look nothing like that! That looks more like a Cato than Belk. Not that you can tell a lot by those little snapshots of Parisian, but the SP Belk looks as nice if not nicer than that Parisian. No wonder people in GA and TN are up in arms...

[rooster8]

That's good journalism right there: Take a picture of the "classy" cosmetics counter to show how wonderful Parisians is and then show a picture of some bargain hunters looking at a clearance rack at Belk.

The message is pretty obvious, but it's still not fair to Belk. Maybe Belk should show them pictures of the SP and Crabtree stores for comparison.

[memphian]

Oh my. Those comparison pics of Parisian vs Belk don't paint a pretty picture, do they? Is that what a typical Belk looks like outside of CLT?

Most of the stores we are familiar with are the stripmall format. Now those stores are in smaller towns and usually compete with Peebles, JCPenney and Sears. That is our perception of Belk. We do have some older mall-based stores (conversions from other chains) that are pretty outdated as well.

Belk fits those markets/locations very well. I do not think Belk is a bad chain overall. I have been to a nice store in JAX and was really impressed but we're used to trading apples for apples. I don't think we'll get that in this deal. I hope so but my gut tells me that we'll have a ho-hum Belk in a location where we used have a very nice Parisian (Memphis and Nashville). I hope I am wrong - please let me be. I think Belk will actually be a great addition to Memphis as we have not had Parisian for very long but in Nashville, Atlanta, Indianapolis, Birmingham, Cincinnati and Detroit the stores are much more established and consumer's have higher expectations (no matter whose name is on the building).

[mallguy]

To a certain extent a Belk store will have certain brands in it, just as a Dillard's store will have certain Dillard's brands in it and a Macy's store will have certain Macy's brands in it. Thus I see Parisian stores going downhill somewhat (with some nice merchandise replaced by Levi's and Saddlebred clothes and the like, which are in pretty much every Belk store, even SouthPark), but hopefully not as badly as the Greenville Mall (SC) Parisian spiraled down towards a JC Penney level after it became a Proffitt's. Becoming a Proffitt's would have been a worse fate for a Parisian store.

[StevenRocks]

What about the Parisians in Charleston, Columbia, etc.? The Columbia store is kind of run down but still has decent merchandise- kind of like a typical mall Lord & Taylor; the Charleston one is pretty nice. Any bets on what happens to them?

NORDSTROM!

What everyone seems to be missing is that Belk has a very successful business model that appropriately aligns merchandise with the targeted consumer. They will operate each store on a market-by-market basis, and I suspect we will see very few fail, much to people's chagrin.

There is a reason that Belk succeeds, while other chains fail, and it's not just luck, or whims of each chain's management. Everyone seems to think they somehow know better than Belk, yet we are talking about a chain of ~270 stores absorbing less than 40 stores. I'd say it's a safe bet that if there wasn't a specific plan for the acquisition, then they would save their time and money.

Thank you, atlrvr. This is what I've been trying to say.

From an Alabama perspective, Parisian's was clearly marketed within the Saks group as a "higher level" store than McRae's/Proffitt's, rather like Cadillac vs Chevrolet within General Motors .

It was more of an Olsdsmobile or Buick than a Cadillac.

To a certain extent a Belk store will have certain brands in it, just as a Dillard's store will have certain Dillard's brands in it and a Macy's store will have certain Macy's brands in it. Thus I see Parisian stores going downhill somewhat (with some nice merchandise replaced by Levi's and Saddlebred clothes and the like, which are in pretty much every Belk store, even SouthPark), but hopefully not as badly as the Greenville Mall (SC) Parisian spiraled down towards a JC Penney level after it became a Proffitt's. Becoming a Proffitt's would have been a worse fate for a Parisian store.

Belk isn't going to throw out the upmarket brands. Some of the private label stuff will change because they won't have rights to the names and vendors anymore, but the national and designer brands are safe.

[mallguy]

NORDSTROM!

Thank you, atlrvr. This is what I've been trying to say.

It was more of an Olsdsmobile or Buick than a Cadillac.

Belk isn't going to throw out the upmarket brands. Some of the private label stuff will change because they won't have rights to the names and vendors anymore, but the national and designer brands are safe.

If Parisian is Oldsmobile or Buick, Belk is Chevrolet.

Belk won't throw out the upmarket brands, but I think Belk will add some more lower-priced clothes to the mix of merchandise in Parisian stores, but maybe even adding the token Burberry jacket or Zegna suit like at the SouthPark Belk. Hopefully Belk will keep the Parisian buyers.

I agree; Nordstrom in Charleston would probably work fine, with the tourist traffic, especially. Citadel Mall or downtown? Would Nordstrom go to Richland Mall, currently being redeveloped?

[DruidCity]

It was more of an Olsdsmobile or Buick than a Cadillac.

I agree. I thought about posting Oldsmobile at first, but figured most here wouldn't remember what an Oldsmobile was

[StevenRocks]

If Parisian is Oldsmobile or Buick, Belk is Chevrolet.

Belk won't throw out the upmarket brands, but I think Belk will add some more lower-priced clothes to the mix of merchandise in Parisian stores, but maybe even adding the token Burberry jacket or Zegna suit like at the SouthPark Belk. Hopefully Belk will keep the Parisian buyers.

I agree; Nordstrom in Charleston would probably work fine, with the tourist traffic, especially. Citadel Mall or downtown? Would Nordstrom go to Richland Mall, currently being redeveloped?

Belk is more like Pontiac than Chevrolet. Now, JCPenney, that's a Chevrolet!

Car analogies aside, if Belk can get the right vendors to commit to selling in the former Parisians, nobody will be disappointed. They're not going to throw that power away.

I think Nordstrom will go into old Parisian mall locations in Charleston and possibly Chattanooga. Not Columbia though; that development is nice, but it's doubtful they're interested in Richland Mall.

[Lady Celeste]

Belk is more like Pontiac than Chevrolet. Now, JCPenney, that's a Chevrolet!

A Pontiac? Interesting........very interesting.