By George Anderson
Contrary to rumors, industry analysts say, the regional department store is not dead.
The announcement that Bon-Ton Stores would acquire the Northern department store group of Saks Inc. (the deal is expected to close in April) is not exactly bringing ringing endorsements from retail industry watchers but many see opportunities for the combined company to exploit market opportunities.
Anne Brouwer, a partner at the retail consulting firm of McMillan Doolittle, told the Milwaukee Journal Sentinel, "One opportunity that the combined company offers is the significantly stronger buying power and the ability to build relationships with vendors."
Another, said Burt Flickinger, managing director of Strategic Resource Group, is the recognition that consumers in certain markets have with local department store banners. Federated Department Stores, said Mr. Flickinger, made a mistake changing Marshall Field's to Macy's.
"Now that Federated is blowing up the Marshall Field's stores, that's going to create a big opportunity for Carson Pirie Scott and Bon-Ton," he said.
Britt Beemer, chairman of America's Research Group, agreed. "If I were Carson, I would relish the opportunity to keep my name. The Carson Pirie Scott name is very big in Chicago."
Michael MacDonald, chairman and chief executive officer of Saks' Northern Department Store Group, will be staying on with the company following the merger. He endorsed keeping the local identities of the department stores within the group.
"We are pleased that we can continue to serve our many loyal customers under our Carson Pirie Scott, Bergner's, Boston Store, Herberger's, and Younkers nameplates, several of which have over 100 years of equity in the markets we serve," he said in a released statement.
Mr. Flickinger believes Bon-Ton can also benefit from Mr. MacDonald and the rest of the talent that comes with its purchase of the Northern group.
"If Bon-Ton successfully retains the top merchants, regional managers, department store managers," he said, "transferring that Northern department store group knowledge into Bon-Ton and Elder-Beerman can be a real corporate coup."
Moderator's Comment: Is there room for regional and local department stores in a marketplace increasingly dominated by national or near national banners? What will it take to survive in a market where the 280 stores to be operated by Bon-Ton will be going up against Federated and others? - George Anderson - Moderator