Turbulent Robinson’s Grows, Retrenches : Chairman Upbeat on Future, Notes Store Is Reaching Lowered Targets

If the J. W. Robinson department store chain took a stress test right now, on a scale of 1 to 10 it would be an 11.

Not only did the retailer’s parent company just get absorbed by May Department Stores, but executives are also struggling to return the store to profitability. There have been markdowns, elimination of marginal departments and a rush to spiff up merchandise.

May executives have even had to revise downward their sales and profit goals for Robinson’s this fall. “My sense is that May was really shocked by how bad Robinson’s is,” said William N. Smith, a retail analyst with Smith Barney, Harris Upham in New York.

Harried at the Top

Meanwhile, Robinson’s officials are busy with festivities to mark Friday’s official opening of the chain’s 24th store--its largest--at South Coast Plaza while the 71-year-old downtown flagship store and headquarters at 7th and Grand are enduring the planned chaos of a massive and long-needed renovation.

It’s no wonder that Tom L. Roach, 43, who was named chairman and chief executive in March, when Robinson’s was starting to cope with some sizable losses, is living at a frantic pace these days.

Since his return to Southern California (he was senior executive vice president of Robinson’s in 1977 and 1978), he has been concentrating on getting inventories and expenses under control, eliminating some marginal departments and, more recently, frequently meeting with May Chairman David C. Farrell and Vice Chairman Lawrence E. Honig. (One such meeting last Friday in New York, in fact, kept Roach from attending a black-tie event at the new South Coast Plaza store.)

“We’ve had a busy time,” he said with understatement recently between meetings in his newly redecorated office.

Although Roach says that “we are mostly out of those problems,” he acknowledges that the chain has a way to go before it returns to the robust results of the early 1980s. What progress Robinson’s has made has come at a cost--some severe and unplanned markdowns in early spring to thin out what Roach described as problem merchandise in home furnishings, designer ready-to-wear clothing, men’s clothing and women’s shoes. Big sales were also held to eliminate departments that didn’t mesh with Robinson’s image as an upscale, “fashion-forward” store, such as lower-end housewares, consumer electronics and small appliances.

Recognizing the markdowns’ ill effects, May executives in August reduced Robinson’s sales and profit goals for the fall season, but the revisions weren’t “dramatically downward,” said Robinson’s President Alfonso Schettini. “They were revised to realistic goals (and) are still numbers to reach for.”

Achievement at Lower Level

Roach contends it is significant that the store is making its targets, even if the sights have been set lower. “For a long time there, no matter what the plan called for, we couldn’t make it,” he said.

Meanwhile, Roach maintains that, aside from setting sales and profit goals and providing some needed sophistication and guidance with data-processing and other systems, May isn’t meddling with Robinson’s. Store openings and renovations are on track, and Roach’s staff has the final say on merchandise.

“It seems very clear that they intend for Robinson’s to remain a quality fashion store and agree that we should remain at the top of the scale and that May Co. California would be the volume seller,” Roach said.

“The profit objectives (are) absolutely fair and achievable and on a timetable that we can deal with.” Moreover, Roach said he has been assured that his own position is secure.

Roach maintains that the markdowns “allowed us to go forward in a much stronger way.” He said new merchandise that started coming into the stores in September will position the chain well for the all-important Christmas season.

Certain areas already have shown strong gains, according to Roach: Liz Claiborne, which in September did twice as much business as a year ago; juniors, led by Guess and Esprit; novelty sweatshirts with bold graphics, and Ralph Lauren/Polo for men and women. Roach expects another big holiday draw to be perfume by Giorgio, the company where Michael Gould, his predecessor at Robinson’s, is president.

“We’re hoping for the October-December period to be considerably stronger than last year,” Roach said.

Some observers sniff that such an achievement won’t be so difficult after last year’s lackluster Christmas. They add that Robinson’s has a ways to go in merchandising to catch up with Bullock’s, the Federated Department Stores unit that is perceived as the latest winner in the merchandising sweepstakes.

Most agree, however, that Robinson’s long-overdue downtown renovation is a plus, despite the short-term disruptions. Schettini acknowledged that the store “was in dire need of attention” for several years but noted that until last year the parent company, Associated Dry Goods, found higher priorities for its capital.

Construction workers now scurry among shoppers and drill and hammer away behind large plastic sheets, all with an eye toward finishing the first floor by Dec. 1 in time for the Christmas rush.

Sarah A. Stack, an analyst with Bateman Eichler, Hill Richards in Los Angeles, said: “Hopefully, the renovation will give people a reason to shop there as opposed to at Citicorp Plaza,” where Bullock’s and May Co. have gleaming new stores up the street at 7th and Figueroa streets. “Robinson’s needs to do something to counter the eastward pull.”

Toward the south, Robinson’s faces more knock-down, drag-out competition at mammoth South Coast Plaza, where the new 215,000-square-foot location joins a full complement of Southern California department stores (the Broadway also officially opens a 208,000-square foot store this week) plus a greatly enlarged Nordstrom, the go-getter Seattle import that spirits away from the main-line department stores so many apparel and shoe sales.

Competition Glitters

Robinson’s and the Broadway are ensconced in a new portion of South Coast Plaza called the Crystal Court, across Bear Street to the west from the original complex. Nordstrom, meantime, has opened a new 230,000-square-foot store next to its original location, in operation since May, 1978. (May Co., an anchor store at South Coast Plaza, opened in 1966 and Bullock’s in 1973.)

When it comes to market share, it’ll be a guessing game once all the construction dust has settled and the merchants have weathered another Christmas. Nordstrom’s inroads have skewed the figures so much that it’s difficult to know who has what--to the relief of some retailers who felt that the constant scrutiny of market share data often resulted in knee-jerk, ill-advised moves.

As far as Roach is concerned, profitability has replaced market share in importance. “Market share doesn’t necessarily lead to profit,” he said. “During five years of market share struggle, the profitability of the (Southern California department store) divisions, formerly at the top of their parent companies’ lists, suffered.”

While Roach professes to be firmly entrenched, the recent departure of his mentor at Associated, Lord & Taylor Chairman Joseph E. Brooks, from the May organization prompted speculation that Roach might follow.

“He’s probably the most outstanding merchant motivator and leader in the country,” Roach said. “But I’m far too busy to speculate on the future.”

However, Roach said, “we feel we will be on target to meet the goals for two years from now,” and he indicated that he intends to be around for that.