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MARSHALL FIELD’S ADDS STORES TO FLAGSHIP

BY NANCY COHEN

Some say that revitalizing the moribund department store may take a high-wire act, and that’s what Marshall Field’s delivered last year — literally. To celebrate the reinvention of its flagship on Chicago’s State Street last September, the retailer staged a feat of derring-do: A troupe of German mountaineers, garbed in designer fashions, rappelled down the building’s facade in a 14-minute vertical fashion show.

The stunt, which drew more than 10,000 gawkers, epitomized Marshall Field’s new commitment to “delivering the expected and unexpected,” as the company put it in a written statement.

This daredevilry was merely the finale to Marshall Field’s nine-month-long effort to revamp its Chicago department store — a death-defying act in its own right that includes dramatic remerchandising and the leasing out of the equivalent of one of the store’s 10 selling floors.

“I applaud the boldness, the desire to do it,” said Walter Levy, managing director of retail trends and positioning at Kurt Salmon Associates, a New York City consulting firm. The changes at the Chicago store will benefit the rest of the chain too, he adds, noting, “the flagship gives a patina to the whole business.”

The 62-unit Marshall Field’s, founded in 1852 and owned since 1990 by Minneapolis-based Target Corp. (then called Dayton Hudson Co.), is hardly alone in attempting a renaissance. In an attempt to reverse a decades-long decline in market share, department stores across the United States are undertaking substantial renovations, improving signage, putting new muscle into their private-label programs, developing exclusive brand relationships and enhancing customer services.

But Marshall Field’s has taken a further step. To distinguish its flagship from what it calls a “sea of sameness,” the company added hundreds of brands, overhauling the assortment by 30 percent to 50 percent, according to various reports. (Company officials declined to speak with SCT for this article.) More radically, it cultivated partnerships with vendors and with other retailers who now operate units within the store’s 812,000-square-foot selling space.

While a shift toward leased departments might suggest an abdication of the role of merchant, Linda L. Ahlers, president of Marshall Field’s, argues that it enables the store to do what it can’t on its own. “We are bringing in partners in and outside our line of expertise,” she told Women’s Wear Daily (WWD). “We wouldn’t have come up with this ourselves. But with all of these elements combined, by being able to provide a whole assortment of fun, unique, exciting and interesting merchandise, what we have created is like an emporium.”

Although such an extensive store-within-the-store strategy may be unprecedented in the United States, it has been implemented to an even greater degree at Selfridges, the London-based department store that shares a lineage with Marshall Field’s. (Gordon Selfridge worked at Marshall Field’s before moving to England and establishing his own store in 1909. He even hired Daniel Burnham, the architect of the State Street store, to design his new emporium, which resembles its predecessor.)

Selfridges underwent its own thorough — and thoroughly successful — repositioning in the mid-1990s, transforming itself from a staid staple of Oxford Street into one of Europe’s hippest retail destinations. It has eschewed house brands to position itself instead as a “house of brands,” leasing as much as half the store to vendors offering everything from bicycles to books to body piercing.

Marshall Field’s emulation of the Selfridges model is an approach “I heartily agree with,” says Marvin Traub, the retail guru who ran Bloomingdale’s during its heyday in the 1970s and 1980s. Concessions allow the department store to “present in a seamless fashion a variety of business with uniqueness,” he said. But he added a caveat: “You have to do it selectively, and so that the customer doesn’t know where the leased department begins and ends.”

In searching for unusual or exclusive goods to install at State Street, Marshall Field’s is reclaiming a long company tradition. It was the first merchant to establish an overseas buying office when it opened an outpost in Manchester, England, in the late 19th century. Of the 500-odd brands the store recently introduced or intensified, many are new to the area, and many represent premium lines and/or cutting-edge tastes.

“Through an unparalleled brand reinvention, we are again emerging as a fashion and trend leader,” Ahlers said in a press release. “Marshall Field’s is becoming the ultimate department store — there’s nothing like it in the world.”

Marshall Field’s is the first U.S. department store to carry the complete Designers Guild home furnishings line from British interior designer Tricia Guild; custom-blended cosmetics from Reflect, an online purveyor of beauty products; and Sean Conway’s gardening tools and flower pots, exclusive to Field’s. It also houses the country’s first Yves St. Laurent accessories boutique, the Midwest’s first Thomas Pink shop of finely tailored shirts for men and women, and the first retail locations beyond New York City for Thomas O’Brien bedding and dinnerware and Femmegems do-it-yourself or ready-made beaded jewelry.

Interestingly, the store’s new partners include retailers as well as vendors. They include Creative Kidstuff, a six-unit, Minneapolis-based toy store; Mimi Maternity, which has 110 stores across the country; Cooks of Crocus Hill, a Twin Cities-based culinary school and cookbook-cookware shop; Eziba, which originated as an online business offering crafts from around the world; and Levenger, a cataloger specializing in reading, writing and office accessories.

Apparel continues to play a major role in the assortment, and the company is trumpeting the addition of scores of fashion labels. But much of the remerchandising scheme seems to be a response to criticism of department store reliance on apparel in an age of casual wear and of elimination of the departments and amenities (from appliances to tea rooms) that once lent them distinction.

Now Marshall Field’s is reinstituting long-discarded categories (children’s toys, home electronics, pianos) and introducing entirely new ones (General Motors concept cars are on display, as is the latest Internet technology from Yahoo).

It has also made food a focal point. In addition to its venerable, wood-paneled Walnut Room restaurant and four other dining venues, the store now offers a Coca-Cola soda fountain, a wine bar with tastings, the Australian Homemade ice cream and chocolate shop, a culinary studio with chef demonstrations and the InField’s sports bar.

An old dog learns new tricks: The Downtown Dog is one of several boutiques Marshall Field’s has added to its Chicago store. Others include British shirtmaker Thomas Pink.

The sports bar is part of the store’s effort to capitalize on its own status as a Chicago landmark and tourist destination. It has added branches of what it calls the “best of Chicago,” including Merz Apothecary, a 138-year-old Windy City icon specializing in natural beauty and health products; Wrigleyville Sports, for jerseys and other paraphernalia; Barbara’s Bookstore, an institution for local bibliophiles; and The Downtown Dog, which carries upscale pet accessories. It is also showcasing the work of a host of local jewelry designers.

Another goal was to restore grandeur to the State Street building, a 1907 retail palace with soaring classical columns, a many-balconied atrium and a domed ceiling with a glittering glass mosaic designed by Louis Comfort Tiffany. Although the store completed a $115 million renovation about five years ago, it invested an additional, undisclosed amount in further refurbishments in 2003. Layers of paint and wallboard were excavated to reveal elegant staircases, crystal chandeliers and windows that once again let in natural light. Artificial light was also increased to brighten the store, and a new music system automatically adjusts its volume according to the clamor of the crowds.

The company expects its efforts on State Street to contribute to a double-digit improvement in sales there, regional director Ralph Hughes told WWD. Reportedly, it has generated more than $300 million annually in the past.

The question remains, however, whether or to what degree the revitalization of the flagship can resuscitate Marshall Field’s as a whole. Like the rest of the department store sector, the chain has struggled in recent years, suffering from steadily contracting sales and store counts (see table). It generated $2.7 billion in revenues in 2002, down more than 3 percent from the previous year.

In a review of parent Target Corp.’s third-quarter earnings, Smith Barney retail analyst Deborah Weinswig called Marshall Field’s “disappointing from both a sales and profitability standpoint” and “a drag on the company’s bottom line.” Marshall Field’s same-store sales for the quarter were down 4.9 percent, compared with a 3.2 percent drop for the same quarter the previous year.

To turn those figures around, the company means to introduce to its branches elements successfully deployed in Chicago. Among the amenities already rolling out across the chain are improved directional signage, strollers for children and parcels, and Field’s Express customer-service kiosks, where sales associates are equipped with two-way radio headsets so they can locate and retrieve items throughout the store.

Remerchandising is taking place at the branch units too, though on a smaller scale than at the flagship. Assortments at individual stores are being juiced up with the addition of between 50 and 250 of the new brands and with vestiges of the store-within-the-store concept. For example, Creative Kidstuff operates a 1,000-square-foot shop at State Street, but displays its toys in less than half that space at 12 other Field’s stores.

Some observers wonder, however, how well the company’s strategy of brand partnerships will translate across the chain. The Selfridges model fails to apply here, as that company operates just four department stores, all in cities. Marshall Field’s 61 branches are scattered throughout the Midwest, primarily in suburban Illinois, Michigan and Minnesota.

“It’s easier to do at a larger volume store,” said Traub. “The issue is how to make it work for concessions at the smaller stores.”

Levy, who consulted on Selfridges’ repositioning, sharpens the point. “Marshall Field is dressing up State Street, which is a one-of-a-kind store, and can only export part of it,” he said. “Selfridges can support the strategy better, with its limited number of locations. Marshall Field has a helluva lot more stores, a lot of them 100,000 or 200,000 square feet. [The strategy is] very upmarket, and there aren’t enough people to support it in all those locations. It won’t be sufficient to move the business to the next level.”

Like other consultants and analysts, Levy has long called upon department stores to embark on drastic change, not just at their flagships but chainwide. Observers complain that most have reacted too slowly and superficially to profound long-term problems — including an explosion of retail alternatives, an emphasis on price, the decline of customer service and a lack of merchandising distinction.

“They’re in a deep slumber, the Rip Van Winkles of retailing,” Levy said. “The question is, will they wake up in time? Refinements — making fitting rooms larger, trying smaller stores, better graphics, shopping carts — that doesn’t solve the problem. When a company goes Chapter 11, it goes through radical change. They shouldn’t wait. They should impose that change on themselves now.”

And notwithstanding the plaudits Marshall Field’s has received for burnishing its flagship, some question the very idea of the branch department store in a society that increasingly values speed and convenience.

“When the department store was king, women were at home with lots of time to shop,” said Ted Kraus, president of TKO/Real Estate Advisory Group, Trenton, N.J. “Who can go shopping all day now?”

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