Recently in department stores Category

The economic downturn is hitting local stores especially hard. Saddest among those affected are the decades-old establishments suddenly facing bankruptcy or liquidation. Recent news affects numerous local stores with particularly long histories:

• 1868: that's when long Strouse's department store in Evansville, Ind., first opened, and the family-run business has been run by the founder's great-grandson for the past 47 years. But Strouse's is beginning liquidation this month and closing around the end of the year.
• Across the border in Ohio, Holcomb's KnowPlace is ending a 137-year-run and closing its last 10 locations. The chain has been slowly closing locations all year.
  
• 89 years: that's how long Hunter Furniture in Birmingham has been open. But current owner Bob Hunter is closing up shop with a final sale starting next week. Hunter cites a combination of factors in the decision to close.
• Compared to the stores above, 1977 sounds like yesterday. But 32 years is a long time for a hometown hardware store to thrive, so in Milwaukee, residents of Edgar are stung that Hardware Hank hasn't found a buyer and is planning on closing.
  

After years of multi-retailer availability, fashion brand Liz Claiborne is changing its distribution strategy and positioning its namesake merchandise for sale exclusively at JC Penney. The decision affects hundreds of retail outlets nationwide, including Macy's and Dillard's.

Claiborne's shift is a direct result of the recession's impact on consumer shopping. Retailers, seeking reasons for shoppers to choose their stores, are asking brands for greater product exclusivity. To secure the Liz Claiborne deal JC Penney has agreed to give the brand a percentage of sales and a share of profits, unlike the typical relationship, where sellers buy merchandise from vendors for sell-through.

"The last year has proven that many axioms and proverbs written 20 years ago have been shattered," said Bill McComb, CEO of Liz Claiborne.

Another interesting twist: news has leaked that luxury retailer Barneys is trying to close two stores. The locations, including one in Las Vegas, are significantly underperforming as consumers cut back on luxury goods. Barneys has denied the rumor.

Despite its national tastemaker reputation, Barneys only has seven stores, so two potential closings would be significant. The store's owners recently claimed sufficient cash on hand to weather the 2009 slump.

Saks, the retailer that helped create the deep-discounting trend last fall, is seeing more shifts in its business. The luxury retailer has begun altering its mix downmarket in order to carry products with more budget-minded appeal. It is also expanding its Off Fifth outlet stores and producing more merchandise to sell directly via outlets.

Saks Chief Executive Officer Stephen Sadove, noting "an evolution of what the consumer wants," is moving to more value-oriented merchandise, including budget lines from high-end brands. While the specialty retailer holds out hope that exclusive, high-end items will still sell, Saks is acknowledging the changes present.

Update: Scrolling through department store archive news, this development is happening in similar ways at Saks' competition. Nordstrom is lowering prices in order to accommodate new shopping patterns, although it's compensating by raising its credit-card interest rates. And Neiman Marcus is encouraging its designers and buyers to look for value as they prepare collections this year. Neiman, similar to Nordstrom, is hoping to keep shoppers at full price, just on lower-ticket items for now. Said a Neiman VP, "We have to get the customer to buy [at] full-price ... [so] you won't get this discounting nonsense."

After a long bidding battle, the Gottschalk's department store chain will be liquidated and all 58 stores will close. Gottschalk's filed for bankruptcy in January and explored a sale and other options before resorting to the liquidation. The action ends a 105-year-old California-based business; the stores will be closed by July.

This is intriguing: a number of malls nationwide are cutting hours, instead of closing stores. Barnes and Noble is changing hours across the country. "General Growth, which is trying to avoid filing for bankruptcy protection, is changing the hours at many of its malls across the country, including Baltimore-area locations White Marsh Mall, Owings Mills Mall, Towson Town Center, Mondawmin Mall and The Mall in Columbia. The malls will close a half-hour earlier Monday through Thursday and close an hour earlier Friday and Saturday. On Sunday, the malls will open an hour later."

Dillard's responded to poor sales and investor pressure by announcing plans to close five stores. The department store chain closed 21 doors in 2008. A handful of store closings are normal in a given year, but Dillard's announcement was timed to respond to the company's performance.

Sears added 24 stores to its planned closings, more than doubling the amount announced in December. The mass-market department store had previously announced 22 closings. Sears has roughly 900 stores nationwide.

Florida-based retailer Bealls is closing a dozen outlet stores in Florida, Georgia and Arizona to improve efficiencies. The company says the closings are part of an overall strategy and not just a reflection of the economy. Bealls, which operates 500 stores in 13 states, is not to be confused with the Bealls in Texas.

Gottschalk's, a department store chain that dates to 1904, filed for bankruptcy and is considering options that include selling the business. The San Francisco-based retailer has 58 stores in the western United States. Gottschalk's expects to continue normal business operations during its restructuring.

Britain is suffering from the economic downturn in similar fashion to the US. Music retailer Zavvi announced 22 store closings today, citing financial investment--and not consumer demand--as the driving force. Yesterday, retailer Marks & Spencer (similar to Macy's in the US) announced it was closing 27 stores and laying off staff; the century-old chain Woolworth's shut down all its operations this week after a final holiday-season sale. While this page is focused on America's retailers, similar stories are playing out daily across the pond.

The occasional store closing by a large chain retailer is part of the normal course of business. Three big names announcing double-digit closings is not:

• Macy's is closing 11 stores in assorted locations around the country. The retailer calls this a normal adjustment but the move is getting significant press.
• Women's apparel chain New York & Co. is closing up to 50 locations over the next five years beginning in 2009.
• Grocery store Supervalu is closing 50 stores in 2009 alone. A brand of Albertson's, the chain closed 25 stores (which they consider normal) in 2008, so the '09 plans represent a doubling of the closures.

Some interesting reading this weekend from two major newspapers.

Barron's: Struggling to Survive at the Mall. Summarizes a lot of what we've been seeing this season, and reports on a wide range of brands and department stores. Since it's Barron's, each company comes with a stock price evaluation as well.

New York Times: Handful of Niche Chains Stay Alive in Retailing. The teen market is doing better than most this season, particularly at Urban Outfitters, and other retailers (like Kohl's and Aeropostale) are well-positioned to weather the recession.

Hey, how about some good news? Forever 21 and Kohl's made a joint acquisition of 46 former Mervyn's stores. Fifteen of the locations will become Forever 21 stores and the other 31 will turn into Kohl's. Kohl's is maintaining its plan to open 50 new stores in 2009.

Sears is expanding its store closings by 50% for 2009. The legendary department store will shutter 19 doors this winter. This article notes sister store Kmart has been slowly closing stores for some time, which is part of CEO Ed Lampert's strategy to maximize real estate value more than a reflection of market conditions.