Dillard’s Will Enter S. Calif. Retail Market

Dillard’s Inc., the country’s third-largest department store chain, will break into the crowded Southern California market next year with the first of a group of stores that will take on other mid-priced retail giants such as Robinson’s-May.

Arkansas-based Dillard’s will debut at the Antelope Valley Mall in Palmdale, said company representative 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 chain, which does business mainly in the South and Midwest, has 272 stores nationwide. Only Federated Department Stores Inc. and May Department Stores Co. are bigger.

Dillard’s enters a hotly competitive market where choice locations are scarce. Expansions by Sears, Macy’s and other large retailers have tied up spaces left vacant by consolidation in the department store industry during the last recession.

Representatives of Dillard’s have been scouting sites from San Diego to Los Angeles 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.

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.”