Department-Store Look Gives Way To A Promenade Of New Faces On Today's `Main Street' -- Malling Of America

Main Street - call it Madison Avenue, the Magnificent Mile, or in Seattle, Pine Street.

For decades, these downtown streets dominated retailing. They were lined with old-line department stores, such as Frederick & Nelson, where shoppers could sip chocolate shakes, leisurely browse through the latest fashions and buy everything from sheets to TVs under one roof.

Today, Main Street looks more like Alderwood Mall.

The center of retailing is not downtown but often a large, suburban mall surrounded, as Alderwood is, by strip shopping centers, discount stores, off-price warehouses and specialty boutiques.

Amid this mishmash of choices, retailers are realizing survival means honing in on a specific customer and delivering the right merchandise on the spot. The department-store mentality no longer works.

As the old stores are replaced by the new, the face of "main street" continues to change. Some standbys, such as Nordstrom and The Bon Marche, grow stronger. But even they face new competition. And for some, such as 101-year-old Frederick & Nelson, now in Chapter 11 bankruptcy reorganization, it may be an end of an era. Creditors are on the verge of forcing F&N's five stores into liquidation by Feb. 19 unless new investors can be found.

Who are the newcomers? Take this stroll through our 1990s "main street" for a glimpse at a few:

THE `NEW' ANCHORS

Five years ago, these retailers had little, if any, presence in the Seattle area. Today, they're mall anchors.

-- Mervyn's: When F&N announced last fall that it was selling three of its stores to Hayward, Calif.-based Mervyn's, many shoppers cheered.

For them, Mervyn's casual, inexpensive apparel was a welcome change from the higher prices and carriage trade image that F&N courted.

The ideal Mervyn's customer, says district manager Mark Hannuksela, is a working woman, aged 25 to 45, with at least one child and a household income of $35,000.

Mervyn's, with average sales per square foot of $226, has always been known as a moderately priced apparel store. But two years ago, Hannuksela said it narrowed its niche even further by throwing out its petite department, dresses and office wear to focus on casual and active wear.

Mervyn's entered the Seattle area eight years ago with a store at the Sea-Tac Mall in Federal Way. It now has stores in Everett, Lakewood, Bellevue and Puyallup. In July, it plans to open stores in Tacoma and Olympia, and move its Everett store in the sites acquired from F&N. An additional Mervyn's will open at Southcenter in October.

-- Gottschalks: "Purchase any suit, sport coat or slacks and get another for only $10." "Buy one swimsuit, get the second for only $1."

Call it folksy, offbeat. It's the way the 23-store Gottschalks chain has spoken to its rural, central California valley customers for 87 years.

Now, Fresno-based Gottschalks is moving north. It will open its first Seattle-area store at the Lakewood Mall on March 3, taking over an anchor spot that F&N once occupied.

Joe Levy, chairman and chief executive officer, is eyeing additional sites as well.

Gottschalks, which averages $208 sales per square foot, sells apparel, luggage and other items and considers middle-income families its niche. It describes itself as a highly promotional chain that peddles Liz Claiborne, Estee Lauder, Calvin Klein and other name-brand merchandise.

Arriving at Lakewood with Gottschalks is a Village East store, a company-owned chain that specializes in large sizes. The company typically opens its Village East shops adjacent to the larger Gottschalks location.

Since it went public in 1984, its sales have increased an average 20 percent annually. In 1990, net profits nearly doubled over the previous year to $6.4 million.

Analysts who follow the chain say Gottschalks draws its strength from avoiding Los Angeles and other large cities in favor of smaller town malls that draw a fashion-conscious but more value-oriented crowd. They also tout the chain's "Nordstrom-style" customer service.

THE DISCOUNTERS

Another breed of newcomers has been discount chains. Always strong in the Midwest and other parts of the country, these retailers are finding markets in the Seattle area to be fruitful as consumers grow increasingly price-conscious.

-- Wal-Mart: Nationwide, it's hard to find a consumer group that fails to fit the Wal-Mart profile. The nation's largest retailer with 1,700 stores, Wal-Mart sells everything from clothing to electronics. Its stores are like large warehouses, usually in small communities near major freeways.

Consumers - from yuppies to working-class families - often think nothing of driving as much as 45 minutes to shop there. Wal-Mart's success shows in its sales. In the 11 months ending Dec. 31, sales jumped 35 percent to $40.6 billion. Industry observers predict the chain's sales to be $54 billion in 1992.

Its secret? The prices.

Wal-Mart spends less than other retailers on advertising and pays close attention to overhead costs. With 1,700 stores, the retailer has the muscle to buy merchandise in volume at significant discounts.

Though a discounter, the retailer touts its own version of customer service with friendly sales clerks who greet shoppers at Wal-Mart's doors with cheerleader enthusiasm.

It's believed that the chain will announce plans to enter Puget Sound this year. The Bentonville, Ark.-based retailer is already moving into Oregon with its first Pacific Northwest store scheduled to open in Lebanon, Ore., in two months.

-- Target: Four years ago, Target entered the Seattle area with four stores. Today, the discount retailer has 12 stores between Olympia and Bellingham with one new store scheduled to open this summer in Burlington.

Like many new faces in Seattle's retail scene, Target tends to find suburban outlets more to its liking. Its stores often are filled with stylish clothing and durable, classy kitchenware. But, like competitor Wal-Mart, Target's success is its low prices.

If shoppers want one-on-one customer service, Target is probably not the place to find it. The retailer prides itself on self-service and has gone to great lengths to install easy-to-read signs and information about merchandise in its wide aisles. The idea is to let shoppers make decisions themselves.

Between now and 1995, Minneapolis-based Target plans a $4.5 billion expansion nationwide that includes opening 300 stores and achieving annual sales of $17 billion.

OLD NAMES, NEW FACES

Even as newcomers crowd the scene, some longtime retailers continue to thrive. But their stores may not look immediately familiar. Anticipating changes in retailing and consumer spending habits, they threw out old ideas and have created a fresher image for themselves in the '90s.

-- Lamonts: Think of the Lamonts of 1987 and images of bright lights, wide aisles and bargain basement sales come to mind.

The Bellevue-based retailer, which has 17 Seattle-area stores, used to sell linen, gift cards, novelty items, children's clothing and women's wear. But its main feature was its unpredictability.

Shoppers did not know what kind of store Lamonts was or whether merchandise purchased on one trip would be available on a subsequent visit. All they knew was that Lamonts held a lot of sales.

Today, Lamonts still has sales, but the unpleasant surprises are gone. The retailer has thrown out most of its non-apparel items and focused its inventory on a handful of leading brand names: Liz Claiborne, Levis, Osh-Kosh.

The frequent sales make Lamont's inventory turnover high, so stores always are filled with fresh merchandise.

-- J.C. Penney: J.C. Penney Co. used to be such a one-stop shopping center that it even sold pet supplies, fishing bait and penny candy.

But Penney's spent much of the 1980s shedding its department-store skin, and is emerging as a more focused, specialty store aimed at middle-income shoppers.

Penney's now stocks mostly apparel, towels, bedding, curtains, housewares and furniture.

"We realized in the 1980s that we had to do a better job of focusing," says Peter Hogenson, a spokesman for Penney's district office. "We were facing competition from discounters on one end, specialty stores on the other."

This change has come with some pitfalls. At first, the retailer tried to be too upscale and alienated some of its more budget-conscious shoppers. It then swung too far in the other direction and was perceived as a discounter. But slowly J.C. Penney is finding its niche.

Penney's 18 Western Washington stores tend to outperform the company's $125 sales-per-square-foot average, says Hogenson. The company plans to open a new store in Puyallup in 1993.

THE SPECIALISTS

As the 1990s spell the demise of generalists, they also signal the continued rise of specialists, retailers who have learned to cater to hurried, impatient shoppers more efficiently.

-- Wet Seal: A video wall that flashes images of rock music stars perpetually. Bright orange floral denim shorts. Psychedelic bikinis.

This is Wet Seal, an Irvine, Calif.-based chain that will open its first Seattle-area store in Southcenter Mall this spring. Two other stores are in the planning stages as well, says E. Lesly Martin, marketing director.

Wet Seal, which has 113 stores mostly in malls, started as a beachwear shop in 1962, and now specializes in junior-size women's fashions. It describes its target customer as teenage girls - and their mothers.

The retailer had 1990 sales of $107.4 million, and profits of $7.9 million, or 65 cents a share.

Wet Seal tends to focus on three to four fashion directions and color themes, and its buyers often work in teams to purchase full outfits rather than individual items. Merchandise is generally grouped by color and assembled as outfits.

-- The Gap: It's been said that no mall is complete without a Gap. With 12 stores in the Seattle area, and a GapKids scheduled to open at Southcenter Mall this spring, that may very well be true.

The Gap, a San Francisco-based chain, sells primarily basics: sweaters, jeans, shirts and casual skirts. Nothing about its styles stands out, and in many ways, retail observers say that's what gives The Gap its strength.

"They have clothes that people want to wear everyday," says J'Amy Owen, president of Retail Planning Associates of Seattle. "Their prices are reasonable and their quality is good."

Although The Gap's focus on apparel basics rarely changes, its colors and style shift constantly, a feature that appeals to many of its fashion-conscious customers.

The Gap, like many specialty outlets, got its start in suburban malls. But in recent years it also has opened stand-alone shops in downtown retail cores, a move that observers say has been successful.

-- The Limited: If no shopping center is complete without a Gap, it must also have a Limited. Or so the adage goes.

In the Seattle area, there are nine Limited stores. And some malls house not only The Limited but several of its spinoff chains as well: Express, Victoria's Secret, Victoria's Bed and Bath Shops, Abercrombie & Fitch and Lane Bryant.

The Limited used to aim primarily at the 12- to 25-year-old shopper, but as its customers grew older and competition from other retailers, such as The Gap, intensified, it began to shift its focus toward a slightly older, career-oriented shopper. Today, The Limited's niche is women aged 25 to 45 years old.

SMALL MERCHANTS

Big isn't always better, and not every retailer thrives as a "cookie-cutter." Some traditional merchants are discovering they can prosper in the '90s by listening to customers and responding to their needs.

-- Renton Western Wear: Walk into this western-apparel shop today and it's hard to believe it once was a general merchandise store that, like the department stores of the past, tried to be all things to all people.

Isaac Benveniste, the grandfather of current President Jerry Kavesh, opened the shop as the Renton Economy Department Store in 1950.

Kavesh's mother, who bought out Benveniste in 1976, switched to western apparel because of a love for Roy Rogers westerns and a realization that a small five-and-dime could not compete with the K marts that were beginning to dot the landscape.

And western it has remained. In the past five years, sales have grown 20 percent annually, and customers now flock to the shop from a 40-mile radius.

Despite this success, Kavesh, who shares ownership with his sister, father and mother, hesitates to open additional shops.

"We came to a decision that there were a lot of things we could do better if we had just one store."