Here's the reality. Fewer department store chains means designers have fewer places to sell their clothing and accessories lines.
According to a USA Today report, general consolidation within the industry along with the elimination of regional department stores in favor of Federated's national branding strategy for Macy's has found some popular designers fighting for rack space as line offerings have been greatly reduced or eliminated altogether.
"You have to stand for something incredibly strong to sell into department store channels, because there is so much competition," said retail analyst Jennifer Black of Jennifer Black & Associates. "Some brands aren't well-known enough."
"Both the retailers and the suppliers are looking at their business with new scrutiny," said Arnold Aronson, a former CEO of Saks Fifth Avenue. "How are we going to get better so we can survive? How are we going to get more efficient, more customer-friendly and give better product for the price?"
Liz Claiborne CEO Paul Charron admitted there are challenges brought about by the new department store reality.
"I've got to bite a short-term bullet," he said of store closings resulting from industry consolidation. "But those (stores closed) were not the best stores ... or the more profitable. I do not lay awake at night and worry."
Liz Claiborne, which owns 43 clothing brands, has hedged its bet by developing lines not designed for department store sale as well as opening its own stores.
Dan Butler, vice president of merchandising and retail operations for the National Retail Federation (NRF), said other designer brands have followed routes along the lines of Claiborne because they saw a need over the years to reduce their reliance on department stores.
"In the industry, there has been speculation that this type of merger might come down the road, so vendors have had the opportunity to think in advance, prepare and diversify what they do," he said.
Jones Apparel is among those that sought growth outside the department store. The company's chief executive Peter Boneparth said department store sales have gone from 80 percent of Jones' business 10 years ago to 20 percent today.
Discussion Questions: Does industry consolidation make it more or less likely that the right brands/items will find rack space in department stores? How will consolidation impact how new brands make it into large national chains such as Macy's?