Are yesterday’s department stores ready to make a comeback?

People of a certain age who grew up in New Jersey probably remember the Bamberger’s department store chain and, notably, its once popular flagship in downtown Newark. By 1986, the chain had been acquired by Macy’s and all its stores were renamed. While many current resident of New Jersey do not know the Bamberger’s name, there’s a chance it may be making a comeback.

The reason is that Macy’s has reached a settlement in a 2011 suit it brought against Strategic Marks LLC of Newport Beach that sought usage rights to the brand names of Bamberger’s, Bullock’s, Foley’s, I. Magnin, Jordan Marsh and Robinson-May.

Ellia Kassoff, founder of Strategic Marks, told the Cincinnati Business Courier that the company was extremely pleased with the settlement. “Now we can move forward with our plans, and we’re going to have the virtual mall, and then we’re talking to mall developers and investors and, in fact, department store owners about resurrecting the stores in brick-and-mortar form,” he said.

In an interview with CNBC, Mr. Kassoff said, “We’re going to be hiring buyers that remember what made those stores successful. We want to make sure we have that experience for the customer.”

In time, Mr. Kassoff told CNBC he is looking to restore the various regional department stores to their former glory by setting themselves apart from the typical “homogenized shopping experience” that most consumers find themselves shopping in today.

Photo: Wikipedia

BrainTrust

"Hmm. Call me a pessimist, but modern department stores seem to be struggling to find a place in an omnichannel world as it is. I have a very hard time seeing how a set of old, almost forgotten brands can make a comeback in this space."

Nikki Baird

VP of Strategy, Aptos


"Well, I AM one of those who remembers these names and I can’t figure out the advantage of resurrecting them so many years after they have been gone. It is akin to the threatened resurrection of the name Circuit City recently announced."

Bob Amster

Principal, Retail Technology Group


""

Adrian Weidmann

Managing Director, StoreStream Metrics, LLC


Discussion Questions

DISCUSSION QUESTIONS: Is there a future for former regional department store brands in today’s retailing environment? Are there any acquired by Strategic Marks that you think have a better chance at success than others? What will be the key to making this grand experiment work?

Poll

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Bob Phibbs
Bob Phibbs
8 years ago

Why? These aren’t beloved brands that were totally unique in 1970, much less relevant at all to consumers of 2016, unless maybe those consumers are now 70 — which I doubt is much of a growth niche.

How about buying Sears and doing something with that?

Nikki Baird
Nikki Baird
8 years ago

Hmm. Call me a pessimist, but modern department stores seem to be struggling to find a place in an omnichannel world as it is. I have a very hard time seeing how a set of old, almost forgotten brands can make a comeback in this space. Especially now that so many of the manufacturers have filled in the gaps in the meantime with their own stores — there’s not much incentive for those brands to spend time and energy catering to whatever strategy a regional department store might try to employ.

This is one experiment that is tough to get behind. But I certainly wish them luck in the effort!

Frank Riso
Frank Riso
8 years ago

When Macy’s made all their acquisitions they ultimately changed the name of the stores to Macy’s. The only way I can see Strategic Marks being successful is by opening up former regional department stores in their former regions but being a larger single corporation behind the scenes. They would then have some level of buying power over the larger stores such as Macy’s, J. C. Penney and Kohls. It is a long shot and I am not sure it would work without buying power and great retro marketing appeal.

Laura Davis-Taylor
Laura Davis-Taylor
8 years ago

You’d have to be in a cave to not see the mid-century movement pretty much everywhere. It’s on-trend to be retro and these brands are as retro as it gets. Their experiences were so full of emotion and discovery and it’s something missed in the often sterile, overstocked environment department stores can be guilty of. The trick will be in the execution. It will have to bleed mid-century magic from all angles and deliver something very unique and memorable. Sounds like a fun challenge and I hope they succeed!

Bob Amster
Bob Amster
8 years ago

Well, I AM one of those who remembers these names and I can’t figure out the advantage of resurrecting them so many years after they have been gone. It is akin to the threatened resurrection of the name Circuit City recently announced. These stores were, in their time, iconic marquees. However, they have been out of sight and mind for so long that the emerging consumer constituency doesn’t know them (and may not care who they were).

The only way for this effort to be successful in what is already a crowded market is to appeal to the nostalgic sentiment with a modern twist. While I personally like the classic full department store concept (the ambience, personal attention and assortment), the younger generations may not, and that is who these brand owners have to attract. So I question the value of trying to resurrect these store brands but wish those who try well.

Steve Montgomery
Steve Montgomery
8 years ago

The retail world has changed since Macy’s purchased those regional brands. When most of them were bought Internet shopping was still in its infancy. People looked things up on the internet, but shop? Maybe the early adopters shopped on the internet. Certainly Amazon was not the powerhouse it is today.

Free, two-day, next-day, same-day delivery weren’t available. BOPIS was just a bunch of letters strung together that made no sense.

To resurrect the brands Mr. Kassoff purchased as virtual stores is one things but to successfully open brick-and-mortar locations is quite another. The cost of an online site does not require hiring clerks, paying rent, etc. IMHO he will find that some iconic products may be able to be revived and some virtual stores, but not the physical locations.

Max Goldberg
Max Goldberg
8 years ago

While most of these brand names mean something to older shoppers, before Macy’s gobbled them up, they mean nothing to shoppers under 40, so Strategic Marks will have its work cut out if they move to resurrect them. Plus, in the age of the Internet, is there room or a need for more department stores?

Cathy Hotka
Cathy Hotka
8 years ago

Someone should tell Strategic Marks that department stores are on the ropes.

Peter J. Charness
Peter J. Charness
8 years ago

I’m sure Millennials are dying to shop in a brick-and-mortar department store they’ve never heard of. Good luck with this one. There’s a reason that most of the well-known brand department stores are having a tough time, and it’s not because of the name over that brick-and-mortar door.

Gene Detroyer
Gene Detroyer
8 years ago

Forget about the brand names, that is incidental. The question is if the department store concept is still viable. I don’t see it.

I think the one chance they have is to play Disneyland and offer an experience that people see on Turner Classic Movies. But you can’t make a retail store out of that, or at least one that would have any sustainability.

I am afraid this is someone’s pipe dream.

Liz Crawford
Liz Crawford
8 years ago

The iconic names from a bygone era won’t be worth much without a real reason to shop there. So the same old rule applies — give the shopper something so compelling that she can’t get elsewhere.

My question is, what would that be? Bringing these older names into the modern age of Amazon, Zulily, Victoria’s Secret and Zappos won’t be so easy. What’s the point of difference? Actually, what’s the point at all?

The names themselves are quaint but won’t hold water unless re-imagined with a the current competitive set. I would argue that today’s department stores, like Saks, Bloomingdales and even say, Zara, need to work very hard to stay alive in business and in the mind of the shopper.

Perhaps a name like I. Magnin could reclaim a niche in the market, but the other banners will have trouble finding an audience.

Good luck with that.

Jerry Gelsomino
Jerry Gelsomino
8 years ago

It could be costly, but to bring back the glory days of flagship department stores with historic roots of regional brands could be fantastic. Built upon a current omnichannel strategy with smart digital connections, it could merge the best of old and new for a really special shopping experience.

Brian Kelly
Brian Kelly
8 years ago

I agree with Nikki, I wish them luck.

Where is the consumer insight that supports the idea?

Cornell’s comments are interesting as he sorts out a “department store.” His advantage is price and place.

I also agree with just about everyone else, Macy’s rounded up the dinosaurs and Jurassic Park hasn’t worked. The regional department store selling model thrived in a post-WWII world and now is out of date. Culture and consumer have moved on.

A&F CEO Martinez sorta calls it “retail Darwinism.” Evolve or die.

Why we say, “retail ain’t for sissies.”

Mohamed Amer
Mohamed Amer
8 years ago

This plays on tapping nostalgia which only recalls the “good old days” and simpler times.

But once you get inside the store, it’ll be quite challenging to execute and bring to life and build on the memories that consumers had of their regional store brands. On the other side of the ledger, can they compete from a buying perspective and in-store cost structure?

So while those names from the last century are interesting, they are not sufficient, in themselves, to ensure a differentiated and successful road ahead.

Jonathan Spooner
Jonathan Spooner
8 years ago

This might be an effort by the larger department stores to “localize” their national chain stores in suburban areas. By appealing to the distant memory of a store brand that originally brought “fashion” to the suburbs they get a hazy halo of validation. And having unique store brands can sidestep the consumer thought of the “same stuff is available online.”

Richard Layman
Richard Layman
8 years ago

I do believe that department stores have a particular resonance and potential in urban districts. But the challenge to make that work in the 21st century is considerable.

I was thinking about this recently, lamenting about Walmart being one of the only “discount department stores” entering urban markets. Sears blew it, in that they could have had a kind of SearsMart urban store, mixing Sears and Kmart, to be more broad ranging than Target and hopefully as cool.

The downtown D.C. Macy’s (formerly Hechts) is a great store. It’s not NYC but it’s way more interesting than the typical suburban branch.

Transit-centricity and delivery options for people without cars would be some of the elements that would have to be there. But more recently, retailers haven’t been interested in developing a specific pro-city strategy, with the exception of NYC.

The other is FOOD. PREPARED FOOD. People eat every day. They don’t buy shirts and furniture every day. Harrods-type food concepts, exhibition kitchens and active programming (like what the best lifestyle operators are doing) etc., are going to have to be integrated beyond the array of hard and soft goods.

And yes, the attractiveness of the names seems to be nostalgic, which won’t resonate with younger audiences.

Karen McNeely
Karen McNeely
8 years ago

Apparently today is the day that I disagree with everyone. Department stores lost it when they became too big, too homogenous, and lost touch with the nuances of their customers in each of their stores.

Maybe I’m too nostalgic, but I remember the days when we could buy 144 banded bottom blouses just for Harlem and Irving or bring in a trailer load of fancy Easter dresses for Evergreen Park because we knew they would sell them. And your good department managers knew it too and would call you up and talk about how they could grow their business.

Everything in the world is cyclical and cycling back to smaller department store retail and bringing the story behind it makes sense to me. But then again, I left department store retail for the museum world, where we have a provenance for many items and the majority of our sales are at full retail.

Craig Sundstrom
Craig Sundstrom
8 years ago

The short answer is no. As much as I would like the effort to succeed — really, what stone-hearted cynic wouldn’t? — the fundamental premise here, that the name itself, divorced from any context or history, has value, just isn’t true. Once the thread of continuity is broken, it’s gone forever. Far better to devote efforts to see that existing brands don’t die off. (Yeah, I’m looking at you Mr. L.)

Ken Morris
Ken Morris
8 years ago

Having worked for many years for Filene’s Department Stores, arch rival of Jordan Marsh in Boston, I believe there is absolutely a value in these brand names. The reality is that folks like Macy’s and May Company, after they made acquisitions, had the mistaken notion that their names and brands were better than the regional brands and that is faulty logic. It’s like the Red Sox and Yankees. The brands are not interchangeable. It was pure hubris to think that. The brands do have a certain cachet and what better way to test this idea than on the web before a brick-and-mortar investment and perhaps resurrect a Lazarus brand.

Camille P. Schuster, Ph.D.
Camille P. Schuster, Ph.D.
8 years ago

I still miss Robinson-May. The brand selection, customer service and pricing was the best of any mid-level department store. All that changed when Macy’s took over. Future success would depend upon doing all three things really well for the region. While Macy’s wants to be the national department store there is room for retailers who cater to regional tastes.

Steve Kohler
Steve Kohler
8 years ago

Great idea! This could be great. Centralized buying has always been only good for the down market.

Martin Mehalchin
Martin Mehalchin
8 years ago

Is this an Onion story?

W. Frank Dell II, CMC
W. Frank Dell II, CMC
8 years ago

There is little future for former regional retailers. They went out of business for a reason, be it competition, price, service, merchandise mix and poor management. Speaking as someone who has worked on many retail bankruptcies, even great management cannot save every concept. The only regional that has some success is Kohl’s. As time passes, the consumers that shopped at these stores forgot them and they are not likely to go back. While the death of the department store has been written many times, they are still here. They just are not for every consumer anymore. Strategic Marks should understand, retail concepts are not like products. Old products can be brought back, but old retail cannot. Even the internet versions of some old retailers have not done very well.

Kenneth Leung
Kenneth Leung
8 years ago

Not sure what the value is of those brands unless they are aiming for the “retro” market. The brand equity has decreased for a lot of these names, and I am not sure, other than in furnishings, that the legacy names mean much.

Christopher P. Ramey
Christopher P. Ramey
8 years ago

Before we’re too critical, let’s not forget Abercrombie & Fitch.

Kate Blake
Kate Blake
8 years ago

No. There is no need for department stores that no one remembers.

Ellia Kassoff
Ellia Kassoff
8 years ago

I’m quite surprised at some of the comments here. Retail is not dead, but the lack of localization is. We plan on bringing back the stores as part of each community. Macy’s created such a national homogenized shopping experience and pulled the roots out of each community. Our goal is to bring localized product, local marketing events and the “magic” of each community back. We’ve done tons of research to know if we brought them back the communities would support them.

Elizabeth Meaney
Elizabeth Meaney
8 years ago

It has seemed to me like American department stores in general have been in decline for quite awhile, especially compared to Paris where our stores like Galeries Lafayette and Printemps are still held in esteem…but perhaps those stores are higher-end urban equivalents to Macy’s (34th Street for example) and Saks and Neiman which ARE still seen as high-quality brands? Maybe it’s just these regional department stores we’re discussing which are old-fashioned. Thoughts?