Mervyn’s Attempts to Pull Itself Up by Wide-Leg-Trouser Belt Loops
Mervyn’s California, the nearly half-century-old mid-level department store known in recent years more for stagnant sales than fashionable offerings, wants to be cool.
In an effort to woo teenagers, the burgeoning population of baby boomers’ children with large appetites for fashion and disposable incomes to match, Mervyn’s is throwing beach parties, sponsoring extreme athletes, promoting hip causes and issuing compact discs.
The unit of Dayton Hudson Corp. joins a long list of department stores that have attempted image make-overs in the hopes of garnering new customers without alienating the old.
Whereas Sears, Roebuck & Co. urged women to check out its softer side and Kmart Corp. targeted baby boomers with its Martha Stewart line, Mervyn’s is bidding for the most fickle consumer group of all. And in its quest for the financial prize that teens offer, Mervyn’s strategy begs the question of whether an old store can learn--and convince shoppers it has learned--such a dramatic new trick.
“This is a challenging marketing strategy because the natural response is for customers to ask if the nerd is hip just because he’s wearing wide-leg trousers,” said Edward Weller, an analyst with Sutro & Co. in San Francisco. “It’s extraordinarily difficult to reverse the momentum of a retail company that’s grown tired. And the company has been working at it and working at it and all these little things they hope will do it, but it ain’t easy.”
Weller said Mervyn’s has strengthened over the last several months, offering low prices and good service to augment the generally well-received merchandise aimed at its key customers: 25-to-49-year-old mothers. Indeed, after Dayton Hudson last fall issued an improve-or-else ultimatum, Mervyn’s in December began posting decent--if far from stellar--year-over-year sales. Mervyn’s sales for the first half of this year are better but uneven.
As it tries to reach teens this back-to-school season, Mervyn’s is leveraging its already significant chunk of the youth market. With 124 stores in California, it is the second-largest seller of juniors clothing, with 14% of the business. It is the leader in denim, with 18% of jeans sales. Teenagers make up 25% of its apparel sales, the company says, contributing to Mervyn’s $4-billion total annual receipts.
The chain, however, knows there is more out there.
Targeting teens--a group that in 1998 had a population of 27 million and spending power of $141 billion--is a key part of the strategy to keep those numbers positive, the company says.
“They represent the future of our customer base,” said Frank Castiglione, Mervyn’s vice president of marketing.
As with Sears, which sponsored a 39-city concert tour featuring teen heartthrobs the Backstreet Boys, Mervyn’s’ first major effort targeting teens was a music and sports festival, the four-day Beach Bash ’99 in Hermosa Beach.
The event featured men’s and women’s professional volleyball tournaments; extreme sports competition for skateboarders, cyclists and in-line skaters; hip bands such as Common Sense and Blink 182; and a women’s sports award and fashion show.
Earlier this month, the company held a “Who Is Gen Y?” conference in New York. The fashion show and merchandise suppliers event also served as an introduction for Mervyn’s’ Trend League, an advisory board of 12 high school juniors and seniors, six from the Bay Area and six from the Los Angeles region.
The company next week begins testing CD sales in 10 stores, offering a benefit album called “MOM 3; Music for Our Mother Ocean,” and it hopes to have a concert tour timed for next year’s spring break.
“If you polled a bunch of teenagers, they may not have thought of Mervyn’s as a cool place or a place that has what they want,” Castiglione said. “All these efforts put together will allow us to reintroduce ourselves and talk to a guest we haven’t talked to in some time.”
Mervyn’s is also sponsoring several extreme athletes, including 15-year-old Jenny Curry, an in-line skating champion.
Jenny, interviewed before she headed to the “B3”--for bikes, blades and boards--competition sponsored by ESPN, said she has always shopped at the San Luis Obispo Mervyn’s for its great fashions, reasonable prices and “all the free perfume you can try on.” But she said she really doesn’t know how most girls feel about the store.
“I’ve never really talked to my friends about Mervyn’s,” she said. “I mainly went with my dad.”
Therein lies the challenge, Mervyn’s said.
“We might have a bit harder time than some folks who have been geared toward this customer base,” Castiglione acknowledged. But if teens aren’t enamored with Mervyn’s, he said, at least they don’t have a negative image of the store.
To get the word out, Mervyn’s has increased TV advertising spending by $20 million and radio advertising by $10 million, the company said. A new advertising campaign begun last month focuses on young people in realistic settings, showing groups of teenagers joking around, kick-boxing and playing with yo-yos.
Parent Dayton Hudson said it remains committed to Mervyn’s, which posted a pretax profit of $45 million for the first quarter. Second-quarter earnings will be released next week.
“Mervyn’s is a profit contributor to the Dayton Hudson Corp. and an important part of the company,” Dayton Hudson spokeswoman Susan Eich said.
As it reinvents itself, Mervyn’s has few successful models. Sears is continuing to struggle, and Kmart has improved but is far from robust. Mervyn’s’ best model might be sister company Target, which is going upscale to reach brand-conscious shoppers--and stealing sales from Mervyn’s.
“Mervyn’s did such a great job serving customers that they didn’t understand in the late 1980s and early ‘90s that they stopped moving forward, and now they have to refresh a lot of the offerings,” Weller said. “It’s never been easy to get a girl to shop in the same store her mother shops in--after she’s 6 or 7 she doesn’t want a dress that’s just like Mommy’s. But Mervyn’s has to be Mommy’s store because Mommy is the buying agent for the family.”
