Tailoring Regional Fit

When Bloomingdale’s made its Southland debut in November 1996, it did so with fanfare and a panache that lured legions of spenders.

Now, 16 months after the heady grand openings, there are signs that some of the bloom may be off Bloomies’ rose.

Retail chains don’t provide sales reports on specific stores. However, if crowd counts at Bloomingdale’s four Southland stores are any indicator of sales volume, the retailer--with its mixed success and one underperforming store--faces challenging times, retail observers say.

Among the obstacles to greater success, some say, is an East Coast style reflected in some of Bloomingdale’s apparel selection--including offerings with little appeal in Southern California.

Then there’s the labor unrest at its Newport Beach fashion and home stores, where a union movement has bitterly divided the work force. Bloomingdale’s employees in Century City also are considering organizing an effort.

Bloomingdale’s also must cope with the baby boom generation’s declining interest in fashion. And it must find a way to sell its upscale merchandise at a Sherman Oaks location that has fewer upper-income shoppers than the communities surrounding its stores in Century City, Newport Beach and at the Beverly Center, industry analysts say.

“You could shoot a cannon through their Sherman Oaks [Fashion Square] store and not hit anyone,” said Jack McGrath, head of GM Communications, a Los Angeles-based firm involved in communications and retail real estate consulting. “When I visit that store, I see sales associates talking to each other because the shopper traffic is slow.”

Bloomingdale’s hopes to engineer a retail revival at that location with a new store executive, a general manager appointed in February.

One of Bloomingdale’s competitors at Fashion Square, however, is Macy’s--a chain owned by the same company that controls Bloomingdale’s. The crowds at that Macy’s are generally considerably larger than those found at the Bloomingdale’s in the mall, observers say.

“I think I can get better values at Macy’s,” said shopper Jennifer Paxton as she left the Sherman Oaks Bloomingdale’s empty-handed Sunday.

However, the company continues to revel in the huge success of its store at the Century City Shopping Center, where Bloomingdale’s hosted a grand-opening bash featuring performances by singers Phil Collins and John Mellencamp and comedian Jerry Seinfeld. The store is among the top three revenue generators in the company’s 22-store chain.

Despite such disparities, Bloomingdale’s remains undaunted and is prepared to make adjustments, said Michael Gould, the chain’s chief executive.

“We all thought the Sherman Oaks store would do as well as Century City, but our level of expectation may have been unrealistic,” Gould said. “We’re surprised and pleased with the sales strength in some areas, but we need to make improvements in others.”

Business at the Bloomingdale’s store at the Beverly Center--a mall with steady sales performance overall--have been just shy of expectations, but sales at the stores in Newport Beach and Century City have been higher than anticipated, said Gould.

Officials at Fashion Island Newport Beach set a first-year sales goal of $55 million and Bloomingdale’s topped that, grossing $58 million, company officials said.

Overall, Gould said, he is pleased with Bloomingdale’s performance in Southern California. However, he also acknowledges challenges.

“This is the most competitive market in the country,” he said.

Bloomingdale’s entry into the Southland market coincided with a regional resurgence in upscale spending. The New York-based Bloomingdale’s, known for its in-store designer boutiques and merchandise exclusives, is a “bridge” retailer that has appealed to fashion-oriented consumers with an inventory priced largely in the upper moderate range.

Bloomingdale’s competes with Nordstrom for those same shoppers, consumers whose tastes are in the moderate-to-expensive range. It also competes with more upscale chains such as Saks Fifth Avenue and Neiman Marcus, which appeal to the luxury market.

Executives at Nordstrom, Neiman Marcus and Saks say their Southern California stores are doing well. Nordstrom’s success is partly due to its Southern California management team’s effective tracking of sales and fashion trends in the region, said Nordstrom spokeswoman Brook White.

In contrast, Bloomingdale’s has an “East Coast style” that clashes with Southern Californian culture, said Jack Kyser, senior economist at the Economic Development Corp. of Los Angeles County.

“This is a tough, competitive market,” Kyser said, “and Bloomingdale’s is a tough concept to export. It’s a very New York concept.”

For example, Bloomingdale’s color selection in apparel is not broad enough; too much of it is black, Kyser said.

The stores’ interiors are also more conservative, again more East Coast style, said a retail real estate executive who asked for anonymity.

“The look of the stores are bland,” he said. “They’re not as inviting because they don’t have the colorful California look of some of the most successful stores in the region.”

However, Gould, who in the early 1980s headed the Los Angeles-based Robinsons chain--which later merged with the May Co.--says he understands Southern California and knows how to appeal to the region’s sense of style.

“We know we have to seek out newness and differentiate ourselves,” he said. “We’re constantly communicating with customers through focus-group research. We’re trying for looks that are special to Californians. We’re excited about this opportunity.”

The company also is battling the 4-month-old union-organizing effort at its two Newport Beach stores, where workers have complained about having to pay for expensive health benefits, as well as contending with rising sales quotas that effectively eliminate commissions.

Employees at the smaller Bloomingdale’s Home Store wholeheartedly favor a union, but many workers at the larger fashion store are opposed to one, even signing a petition against the concept.

Bloomingdale’s won an early round when the Teamsters union withdrew a petition to represent workers at the home store. But the Teamsters have since joined forces with the United Food and Commercial Workers union and have redoubled efforts to gather enough signatures to qualify for an election.

The organizing drive is taking its toll on morale. “We must work together and help each other--rather than fight each other,” store manager Kathy McDonnell wrote in a letter to employees in late January.

The two unions also have joined forces in an effort to organize Macy’s two South Coast Plaza stores. Organizers say they have gathered enough signatures to warrant an election, but not enough to guarantee a victory.

Now, workers at Bloomingdale’s Century City store have formed a committee and plan to meet soon with their counterparts in Newport Beach to study whether to proceed with an organizing drive.

Bloomingdale’s also has demographic challenges nationwide, said Kurt Barnard, a New Jersey-based retail economist and publisher of Barnard’s Retail Trend Report. The chain prospered in the 1970s and 1980s largely because of the patronage of young urban professionals (commonly called yuppies), Barnard said.

“The yuppies are now in their late 40s and 50s and 60s, and they don’t care about fashion,” he said. “They’re spending their money on home furnishings and travel.”

Professionals in their 20s and 30s tend to buy less expensive clothing than Bloomies offers; if they’re more affluent, they shop at Saks or Neiman Marcus, Barnard said.

There are narrower demographic problems for Bloomingdale’s in Southern California, said a Bloomingdale’s consultant who requested anonymity. The chain tends to put stores in communities with more high-end incomes than can be found in the communities surrounding Sherman Oaks Fashion Square, said the consultant, who pointed out the chain’s restrictions in choosing its Southland sites.

Bloomingdale’s gained entry to California markets when its parent, Cincinnati-based Federated Department Stores, bought in 1995 the assets of the now-defunct Broadway Stores chain, including its 41 store sites in the state. Federated’s chains--Macy’s and Bloomingdale’s--chose the most promising Broadway sites. Retailers commonly lease store sites, but Federated owns the location in Sherman Oaks, which has higher income levels than many other parts of the San Fernando Valley.

“Bloomingdale’s selections were not necessarily their first [location] choices,” said the consultant. “The company decided to open a [San Fernando] Valley site, and Sherman Oaks was the best location.”

There’s a greater concentration of high-income households near the Bloomingdale’s in the Beverly Center, but many of those consumers shop on Rodeo Drive or at Saks and Neiman Marcus--Beverly Hills stores near that mall, the consultant said.

Elaine Cohen of Los Angeles, however, is a regular shopper at the Beverly Center Bloomingdale’s.

“There’s more to value than price,” she said. “There’s more quality and selection here. It’s also convenient because I live nearby.”

Gould expects to win over more Southland shoppers like Cohen. Bloomingdale’s sales per store were stronger than the national average for department stores last year. Some Bloomingdale’s stores with lackluster starts in other parts of the country are now strong performers, he said.

Some observers agree with that assessment.

“Ultimately, Bloomies will do fine here,” said the Bloomingdale’s consultant. “Typically, it takes a while for communities to understand what Bloomingdale’s stands for.”

Times staff writer Russ Stanton in Orange County contributed to this story.