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May Department Stores: Shares
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May and its divisions, including Foley's, are traditional department stores that sell a broad array of products, consisting of hundreds of merchandise categories and thousands of brands. Intimate apparel constitutes approximately 3% of May's overall sales. May's core customers are women between the ages of 40 and 50 years old. May is considered a branded business in that it sells products manufactured by others as opposed to a private label business. May's bi-annual Market Share report, which breaks down its market share and apparel store competitors, does not mention VSS.
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There was finally a break in 1996, when department stores saw the business environment improve from the previous two years. The department stores placed more emphasis on sales of women's clothing, which was always an important item to increase store sales. The combination of better quality, higher fashion women's wear, and increased demand due to improved economic conditions in 1996 helped spur sales for department stores. Regionally, the increased economic activity in California and the Pacific Northwest ... aided sales. Most large department stores also placed more emphasis on meeting the new purchasing trends—namely, that apparel, jewelry, and quality home furnishings play more of an important share of department store sales than the home improvement hard goods and home electronic products did in the past. Many department store retailers were also emphasizing their own private label brands, which had significantly improved in quality and marketing.
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The outlook In the future, the late 1990s may well be viewed as department stores' "good old days." "As a whole, the industry is experiencing good times after the consolidation of a few years ago," says Marcon. "I think that department store chains today are focused more on improving their own operations, and less on trying to steal market share from one another."
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The department store division of the retail industry was hit particularly hard in the early 1990s by discount retailers siphoning market share away and by a drop in consumer spending. It rebounded... in the late 1990s with sales growth of just over 6 percent since 1988, and department stores slowly benefited from the rise in consumer spending. However, this division faces many barriers including the rising popularity of discount mass retailers. For example, Sears—one of the oldest and best-known department stores—was ousted from its number one position in sales by Wal-Mart, which had over three times more revenue in 1998. In an attempt to regain their leadership position, many department stores tried to create a new identity that would attract new customers, as well as keep existing customers happy.
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The department stores' battle for apparel market share with stand-alone and in-line stores is ongoing. Demographic factors, particularly with the aging of the U.S. population, complicate matters. Department stores, notes Stein, could find themselves with another advantage as older consumers search for quality.
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