New acquisition by Belk

[kayman]

FWIW--Riverchase McRae's never operated as a full line store after the Proffitt's was opened. It pretty much immediately became a clearance center for Saks. It hurt all three--Rich's, Proffitt's, and Parisian--that customers could buy comparable stuff, even in season stuff at the McRae's, for pennies on the dollar. Funny thing was, except for when the stuff went $2 and $3 at the clearance store, the stuff was a better deal before transfer at the Proffitt's/McRae's clearance method of yellow dot 70% off clearance. Some items went UP in price when transferred to the Clearance Center.

Personally, I don't think Saks ever intended to have 2 Proffitt's/McRae's storefronts in the Galleria; I think that was a by-product of the dispute with Pizitz.

Belk, while you say they have pull-power with vendors in NC, had zilch with them in AL. There were likely big names that didn't have contracts with Proffitt's/McRae's and then would not come into the Riverchase Belk because of contractual obligations to Parisian/Saks.

Riverchase Galleria is still a big regional mall. People come from all around and stay at the Wynfrey to do back to school shopping, Christmas shopping, Black Friday, etc. It is a destination mall for a lot of people, and "if you stock it, they will come" is pretty true. While strip-mall Belk stores get everyday returning customers from the locals, the Galleria has a greater number of shoppers who only come 1-2 times a year. And they aren't coming to buy BTKids and private house labels.

That the Riverchase location you say does moderate priced business is in part because that's all that was ever in there. Saks wasn't going to work to put vendors in there that they could have since they were looking to sell. It [Profitt's] opened in October, and the deal with Belk was announced in April. I can't help but think that Saks moved Proffitt's-McRae's to the current building in order to make Riverchase look more attractive; hard to sell yourself when the building you're in is that small (for an anchor), a roof like a sieve, etc.

People here didn't "get" the whole Proffitt's-McRae's connection. They didn't understand that they were the same company, and with the whole McRae's-Pizitz debacle, they were leary of Proffitt's, a store whose name they had never heard. It did not help that McRae's card holders were not automatically given a Proffitt's card to replace their McRae's because they didn't "get" that they could use the them interchangeably, "because if everyone has been telling us Proffit's is McRae's under Proffitt's-McRae's, but I can still use my McRae's card here, why do I have to apply for a Proffit's card?" Had the Riverchase Proffitt's opened as a McRae's, it would have had an easier time keeping its clientele.

Well said Alababy. In other words, the store was just a big ole' front for Saks Inc. All I have to say is Belk better have all their ducks in a row when they come into Birmingham. Remember Birmingham is a national test market for nearly all national retailers. The region's demographics match down to a tee the demographics of the country as a whole, so if doesn't fly there most likely it wouldn't fly nationally either. That is something Belk better remember with this Parisian to Belk transition.

[A2]

Belk is not taking this purchase lightly. If the naysayers would get over their prejudices and give Belk a chance to succeed or fail, I think the end result will please nearly everyone involved.

I Agree ^^

A2

[kayman]

Breaking news: Bayer Properties, owner of The Summit, is suing Belk and Saks over the current Parisian's lease at the upscale shopping center. They want to cancel the lease with retailer to replace the store with a more appropriate upscale tenant for the center's target demographic. Bayer is arguing that the chain will bring down the quality of their center from a financial standpoint. I told you guys that Bayer was going do something to get rid of Belk before that chain to be converted.

I will post a link for the story when it become available.

[DigitalSky]

I seriously think they [bayer] are blowing this out of proportion.

[mallguy]

So it's not just some Parisian fans on this board who think that Belk won't cut it in upscale centers?

http://www.al.com/birminghamnews/breaking/...es/2006_09.html

The plaintiff is complaining that Belk is not a "first class retail fashion department store". Goodness.

I think Bayer will have a tough time; typical retail leases require "first class" stores but I'd guess that just means A-grade, in line with other A-grade merchants in the trade area (i.e., not run-down or off-price). There are plenty of leases for "first class" movie theaters at the neighborhood mall, for example.

[atlrvr]

Nope.....a Birmingham based retail developer with only 4 malls (non-of-the-other-which are in Belk territory) believes it too.

Sorry, if Simon was willing to suck it up for Dick's, then Bayer can suck it up for Belk.

[kayman]

Nope.....a Birmingham based retail developer with only 4 malls (non-of-the-other-which are in Belk territory) believes it too.

Sorry, if Simon was willing to suck it up for Dick's, then Bayer can suck it up for Belk.

Simon is a much larger corporation with a lot more room to have that type of liabilities in it portfolio. Simon gross in the $10 billion+ annually in revenue while Bayer barely cracks into the billions if any. BTW, they may have more than 4 retailers center, but their largest ones are all upscale centers. Sorry, their reasons are legit because Belk isn't worth the risk.

[Alababy]

This all goes back to perception, first impressions, and politics in retail. What a coincidence (cough) this was announced today when Belk executives happen to be in Birmingham.

I think the "case" will be dismissed. All anyone has to do is look at the vendors that Belk has contracts with in NC, and see that Belk can bring the same to The Summit. The problem has been that Parisian/Saks has blocked Belk from being able to carry those same vendors in Alabama up to this point, so the best example (The Galleria) has not be able to step it up like it should have. This suit is just perpetuating the idea that Belk can't be upscale, when they have modeled that they can.

Should things proceed with Parisian, Belk would be very likely to continue those vendor relations since they already have relationships with many of them. Bayer hasn't done their homework.

[mallguy]

I did a Yahoo search for court cases involving "first class" stores in shopping centers- a cheap clothing store and Shoe Show were both considered "first class" stores in some cases.

By that standard, Belk shouldn't have a problem. But how insulting to it this lawsuit is!

[peaceloveunderstanding]

^

That mall isn't really THAT upscale either. It has a Saks and some other high end stores, but it has lots of typical mall stores like Northlake or Carolina Place. Belk has a few stores that do well in malls like that, and stores that are in higher end malls.

[StevenRocks]

I seriously think they [bayer] are blowing this out of proportion.

I agree. This is ridiculous.

Sorry, their reasons are legit because Belk isn't worth the risk.

I've had about enough of this. Belk has relationships with most of the same vendors as Parisian and, as such, would not sever those relationships in any Parisian store they aquire without good reason.

I think the "case" will be dismissed. All anyone has to do is look at the vendors that Belk has contracts with in NC, and see that Belk can bring the same to The Summit. The problem has been that Parisian/Saks has blocked Belk from being able to carry those same vendors in Alabama up to this point, so the best example (The Galleria) has not be able to step it up like it should have. This suit is just perpetuating the idea that Belk can't be upscale, when they have modeled that they can.

Should things proceed with Parisian, Belk would be very likely to continue those vendor relations since they already have relationships with many of them. Bayer hasn't done their homework.

Thanks, Alababy. Belk can and Belk will bring a quality store to The Summit and elsewhere.

[rockhilljames]

Great God, I never knew that Alabama was such a whiny state. Get the fudge over it.

I think the "case" will be dismissed. All anyone has to do is look at the vendors that Belk has contracts with in NC, and see that Belk can bring the same to The Summit. The problem has been that Parisian/Saks has blocked Belk from being able to carry those same vendors in Alabama up to this point, so the best example (The Galleria) has not be able to step it up like it should have. This suit is just perpetuating the idea that Belk can't be upscale, when they have modeled that they can.

That's a great point, it seems to me that the people around Summit and Alabama are misinformed and not inclined to do their homework.

[mallguy]

The shopping center owners even visited the SouthPark Belk and discussed the situation with Belk before filing the lawsuit. Clearly, they aren't convinced that Belk can be first-rate:

http://www.al.com/news/birminghamnews/inde....xml&coll=2

[kayman]

^

That mall isn't really THAT upscale either. It has a Saks and some other high end stores, but it has lots of typical mall stores like Northlake or Carolina Place. Belk has a few stores that do well in malls like that, and stores that are in higher end malls.

The same could be said about SouthPark aside from the N-M wing where all it upscale stores are as well. That has absolutely nothing to do with the fact the owners don't want the store at their center. You guys here in Charlotte have this superiority complex about Belk like they can't do no wrong. Well, some don't agree with you guys and you need to realize that.

[kayman]

Great God, I never knew that Alabama was such a whiny state. Get the fudge over it.

That's a great point, it seems to me that the people around Summit and Alabama are misinformed and not inclined to do their homework.

Birmingham or Alabama is not whiny. They just know how Belk stores are around here before and they want no part of it. That article in The Tennessean nearly 2 months ago says that other places are in agreement with this same view. Flagship stores like SouthPark are usually given the best treatment over most other stores, period. Have you ever been to the Dillard's flagship at Scottsdale Fashion Center? I have and there is a major difference in selection of that store and even the Dillard's main first-tier store in Park Place in Little Rock. It almost amusing how shocked you guys are about how others view you "hometown" company Belk. Everybody isn't going to agree with you guys here about Belk. Honestly, am to a point I've about had it with Charlotte in general. I used to be a fan of this place but the more I hear about how you guys have this superiority complex, the more this place irks me. You guys act like you know what is good for everybody everywhere else when in reality you don't. Everything isn't for everybody.

[Alababy]

After today's article, I can only conclude that Bayer is looking for "insurance" that Belk will make the Summit closer to what can be found in Charlotte than what is currently found in Birmingham. There is little rational explanation for anything else.

Now that Saks/Parisian will not have the influence over vendors here in AL, Belk will be able to bring in some of the vendors they already have in other areas as well as gaining Parisian vendors that it doesn't.

[Rufus]

Leonard23, did you wake up on the wrong side of the bed. No one really said anything degrading or overly superior regarding Brimingham and the Summit. There are some who find the Summit to be high middle class rather than upscale. Southpark is definately an upscale mall, maybe not the upper echelon, but its tenants are quite upscale. the Summit is along the lines of say Crabtree or the Streets at Southpointe.

Bayer is blowing this out of proportion. Belk said it will guarantee that malls like the Summit and Phipps Plaza will get large sums of money in order to upfit the Belk stores to the level that SP or Crabtree has. If Belk loses this case, what retailers are on your wish list for the mall?

[rockhilljames]

Leonard, it cuts both ways. I'm tired of hearing people from Alabama rip Belk when the perception here is that Parisian and Belk are exactly the same quality. I've been to Parisians in Columbia and Asheville and they didn't impress me at all. Seemed like a clone of all the Dillard's, Hecht's, and Belks I've ever been in.

Everyone there seems to have a lot of sour grapes over Belk buying the Sak's brands. If Sak's had run them properly, it wouldn't have needed to sell them. It seems to me on reading the specifics of the deal that Parisian's was the most profitable of the chain, why they would sell them for such a low price is beyond me.

No one I know from Charlotte has a superiority complex, I think most of us can acknowledge that Belk has ranges of store quality and that the stores in outer areas don't reflect the quality we're used to.

You need to understand that for a long time, Belk's strategy was to locate in smaller metros or areas outside of larger metros and stay away from regional malls. It was a very profitable strategy, but it created some smaller market, inferior stores.

What you guys seem to be unwilling to accept is that Belk can do stores that are just as high quality as anything Parisian has put out.

I've been to Summit and it didn't strike me as being more upscale than South Park or any other high-end retail area that I've been to in countless cities. Whatever.

If Birmingham hates Belk so much, just organize a boycott. The store will go out of business for lack of sales and you guys can lure someone else to take it's place.

Enough.

[gDriver]

The real issue behind all of this discussion is the brand erosion caused by a retailer that serves a market that requires a less than a "first class" clothing selection. The image that's left in a consumer mind is very damaging to the stores reputation. This is plaguing Belk, big time, in Alabama. But, the other department stores have to deal with it too in SC and NC. Its common retail practice to put merchandise in stores that will sell based on demographics. Belk does it. Parisians does it. Even within brands, the selection will be different from store to store based on the clientele. There are factors other than demographics (store size, vendor agreements. etc) that come into play. However, all things considered equal, the characteristics of the local market is going to determine what will sell. Having said this, Parisians made an attempt at entering the Greenville SC market in the mid 90's. Their selection was horrible but only slightly less desirable than Belk's and Dillard's selections in the area at that time. Profitts tried to enter the Spartanburg market around the same time, achieving the same results as Parisians. The selection in all of the stores was based on what the companies thought would sell in the area. In my book, Parisians, Belks, Dillards, Hechts and Proffits are a step below the Nordstroms and Neiman Marcus because of this. Nordstroms recently decline to build a store in Greenville because they did not feel that the market could sustain a store with the selection that they are known for.

[kayman]

The real issue behind all of this discussion is the brand erosion caused by a retailer that serves a market that requires a less than a "first class" clothing selection. The image that's left in a consumer mind is very damaging to the stores reputation. This is plaguing Belk, big time, in Alabama. But, the other department stores have to deal with it too in SC and NC. Its common retail practice to put merchandise in stores that will sell based on demographics. Belk does it. Parisians does it. Even within brands, the selection will be different from store to store based on the clientele. There are factors other than demographics (store size, vendor agreements. etc) that come into play. However, all things considered equal, the characteristics of the local market is going to determine what will sell. Having said this, Parisians made an attempt at entering the Greenville SC market in the mid 90's. Their selection was horrible but only slightly less desirable than Belk's and Dillard's selections in the area at that time. Profitts tried to enter the Spartanburg market around the same time, achieving the same results as Parisians. The selection in all of the stores was based on what the companies thought would sell in the area. In my book, Parisians, Belks, Dillards, Hechts and Proffits are a step below the Nordstroms and Neiman Marcus because of this. Nordstroms recently decline to build a store in Greenville because they did not feel that the market could sustain a store with the selection that they are known for.

I think that probably the most rational way it come have been put. All this consolidation is just plain dangerous and it just lead to decline in quality merchandise in general across the board.

[mallguy]

I've been to Parisians in Columbia and Asheville and they didn't impress me at all. Seemed like a clone of all the Dillard's, Hecht's, and Belks I've ever been in.

There is no Parisian in Asheville. The Columbia one is in a dying mall. In Greenville, Parisian just picked the wrong mall, which died and is now being demolished.

Proffitt's and Hecht's being "a step below" Nordstrom and Neiman Marcus is like Kia being "a step below" Jaguar and Rolls-Royce.

[gDriver]

There is no Parisian in Asheville. The Columbia one is in a dying mall. In Greenville, Parisian just picked the wrong mall, which died and is now being demolished.

Proffitt's and Hecht's being "a step below" Nordstrom and Neiman Marcus is like Kia being "a step below" Jaguar and Rolls-Royce.

Regarding the Greenville Parisian store, it was added as part of a massive remodeling effort by the owners. Arguably, if Parisian was popular, it could have been a turning point for the mall. At the time the mall had a Dillards, William-Sonoma, Eddie Bauer, Ann Taylor, White House/Black Market and others.

And I was trying to be nice to Proffitts and Hechts with the "step below" comment. Actually, the Hecht store at South Park, that was just bought by Macy's, was not that much different from the Dillards in that mall.

[mallguy]

Regarding the Greenville Parisian store, it was added as part of a massive remodeling effort by the owners. Arguably, if Parisian was popular, it could have been a turning point for the mall. At the time the mall had a Dillards, William-Sonoma, Eddie Bauer, Ann Taylor, White House/Black Market and others.

And I was trying to be nice to Proffitts and Hechts with the "step below" comment. Actually, the Hecht store at South Park, that was just bought by Macy's, was not that much different from the Dillards in that mall.

That's fair. One reason I loved that Parisian was because I could always get a parking spot right in front of any entrance! It was kind of quiet, and then the merchandise got thinned out probably because it didn't sell well. I shopped at that store the day it opened in 1995 and it was nice, but then a year or two, it didn't have the range or quality of clothes it originally did.

Perhaps the Summit's owners look at Greenville Mall to see what can happen when anchor nameplates (and thus merchandise selection and quality) go down? In a competitive marketplace, that can mean mall death. I assume the Summit will also be losing its Saks eventually?

This whole thing is funny from my perspective, although if I were Belk I'd be completely offended, as people perceive it being such a class B chain that they are willing to invest money and time to avoid having a Belk store in their center. I don't see how Bayer can win this lawsuit, though, unless the lease is tightly crafted.

[Miesian Corners]

Here's what I think. Parisian is a great store. Customer service, not high fashion, is its strong point, though. I am not saying it has substandard merchandise, rather that the big deal with Parisian is and has always been that it was the "Nordstrom of the South". I believe that retaining this is Belk's bigger problem with the acquision.

There is no doubt that Belk has its work cut out for it. It tries to be all things to all people, and while those of us in the Carolinas might understand that the crappy "C" store in BFE, North Carolina is competely different that the "A" stores at Crabtree in Raleigh and SouthPark in Charlotte, educating consumers in Alabama and Georgia is going to be challenging. I've said this before, does Belk really expect a Buckhead housewife to believe that Belk Phipps is different from Belk Albany (GA)? Why should they? If Belk has always had crappy "C" stores in Georgia, why would ANYONE think otherwise?

I truly believe (although I don't think it will happen) that if Johnny Belk and his team were really smart, they'd take this as an opportunity to rebrand the entire chain. Dump that horriffic logo (which employees disparagingly call the "Big B") that the company put into place in 1970 with something more contemporary (as Nordstrom and Saks have done). Use "Belk" only on the upper end stores and rebrand the "C" stores as something else. Differentiate them somehow. Let the consumer know, without a doubt, that there is a difference between the Belk in Flowood, Mississippi and what will be the store in Phipps in Atlanta.

[NCMike1981]

Are there any A or B Belk stores in the Alabama and Georgia market or are they literally all C stores? If so how are the A and B stores doing?