Dillard’s to Open Its First Southland Store

Dillard’s Inc., the country’s third-largest department store chain, will open its first store in Southern California next year. More branches will follow the one in Palmdale, a company representative said Tuesday.

The mid-priced retailer will set up shop in a new building at Antelope Valley Mall, said Dillard’s spokeswoman Julie Bull. She declined to say how many other stores Dillard’s plans to open in Southern California or where they might be located, but acknowledged there will be more.

“We typically operate several stores within a market,” said Bull. The Little Rock, Ark.-based chain has 272 department stores nationwide and competes with mid-tier department stores such as Robinson’s-May.

Analysts and brokers predict the Palmdale store will be the first of at least a handful of Dillard’s from San Diego to Los Angeles. The retailer has been scouting Southern California for the last three years, said James Jones, president of the Torrance Co., which owns the Del Amo Fashion Center.

“They felt they needed to have five locations tied down [here],” Jones said.

Sources say the retailer has met with the owners of Brea Mall, Del Amo Fashion Center and Topanga Plaza. However, Dillard’s negotiations with many mall owners were put on hold earlier this year while it digested its acquisition of Mercantile Stores, owners of more than 100 apparel stores in the South and Midwest, including Gayfers and Maison Blanche.

Brokers and other sources close to the Palmdale deal said Dillard’s chose the desert location because it is reasonably close to Dillard’s stores in Henderson, Nev., and Las Vegas. Dillard’s entered the California market last year with a branch in Stockton.

At Antelope Valley Mall, Dillard’s plans to build a 150,000-square-foot store that will be the first two-story structure in the center. It will be the centerpiece of an expansion that will include nine other retailers, mall sources said. Construction has already begun on a portion of that expansion. Dillard’s and the other stores are expected to open in November 1999.

Analysts say Dillard’s will face a challenge establishing its identity here and differentiating itself from competitors. But its lack of recognition could also be a plus, said Irvine-based retail analyst Greg Stoffel. Dillard’s won’t be in the awkward position of taking over stores that local customers prefer. “They can start from scratch without any baggage,” Stoffel said. “It’s not like when Bullock’s changed into Macy’s.”

Stoffel said Dillard’s will need to open three to five locations in Southern California to justify advertising and distribution costs. But finding sites for these stores will be difficult, he said, because other chains have taken over many of the stores emptied during the 1990s retail recession. Building a new store at an existing mall is often difficult because anchor tenants have a say in who the mall owner leases to.

Instead, Stoffel said, Dillard’s will probably focus on new malls or locations where other department stores have folded.

Antelope Valley Mall, which opened in 1991, is the only mall within 50 miles of the growing communities of Palmdale and Lancaster. It is 90% occupied and containing department stores such as Sears, JC Penney, Mervyn’s, Gottschalks and Harris’.