Department store downward spiral: at least the shelves are stocked.

In these lean times, hardly a day goes by that our preferred media outlets don’t promulgate another gloom-and-doom indicator regarding the retail sector: a national chain cutting locations, more chapter 11 filings, an Amazon buyout. A number of syndicates and even some independent outlets have taken a more visual approach, documenting the dire straits of department stores through photographs showing how poorly maintained (or, in some cases, how bereft of merchandise) they are. I’d flag this for truly tawdry journalism, because it requires little more than trolling around with a camera, peeking up corporate America’s skirt–i.e., clickbait followed by little real analysis. But that would make me a hypocrite, since I’m guilty of it myself. Earlier this year, I exposed the desperate cost-cutting measures J.C. Penney has taken, and my act of photographing the department store’s dimly lit entrance nearly got me kicked out by mall security.  And, of course, I couldn’t resist at least a few snapshots of the pathetic displays at the neighboring Sears.

And now, in the interest of churning out a quick article while I manage a few other irons in the fire, I’m at it again. But hey—at least I’ve got analysis. And this is something I haven’t seen before, at least not in this context. Goodwill-style displays at a Macy'sSure, it looks like another jumble of clothes, crammed together on a rack. We’ve seen it all before, particularly in recent years, when more and more department stores lack the staff to maintain cleanliness and aesthetics to their presentation. But this isn’t an isolated display.IMG_7551 editsIt’s the whole dang section. And it’s not a T.J. Maxx or a Big Lots. (Those two seem to be doing well.) Nor is it an explicitly labeled clearance section.

It’s a wing within a Macy’s—which as recently as a decade ago was the pre-eminent upper-middle department store across the country. And it’s not even a mall that, by any standard metrics, is struggling. It’s the Fashion Centre at Pentagon City, in prosperous Arlington County, Virginia, just across the river from the National Mall (and, in keeping with its name, a stone’s throw from The Pentagon). Not only is this mall brilliantly positioned in the middle of a surging, white-collar area, it’s broadly accessible by highway, subway (DC Metro), and even by foot, through the hundreds of residents in the high-rise apartments that surround it. And stalwart Simon Property Group runs the place—the largest and generally most successful mall manager.

Most of these retail montages with the empty shelves and ramshackle displays have targeted Sears and Kmart for ridicule. But here an entire wing of Macy’s appropriates the presentation of a Goodwill. And that’s not really being fair to Goodwill, because even if their clothing racks are hopelessly cramped, they often group the hanging clothes by color. Why would Macy’s stoop to this level, especially in a mall that, by almost all metrics, is performing well above the national average? (The other department store is a Nordstrom—usually a good sign.) My only guess is that staffing is so sparse that they’ve all but given up on the neatly folded, mannequin-centered displays, because they’ll never have the manpower to keep them looking good. Rather than attempt something bold and fail, it’s better not to attempt at all. A disheveled arrangement of shirts doesn’t turn the inventory any better than the “discount” approach, and it certainly leaves the sales associates at Macy’s more time to focus on answering customer questions or simply ringing up those purchases as quickly as possible.

If Macy’s continues to operate as a bricks-and-mortar outlet in the years ahead, I suspect we’ll see self-serve kiosks, much like we already have at department stores. They’ll prevent stealing by allowing the customers to automatically remove those bulky security tags by sticking it within a mechanism on the kiosk after they have purchased it. And the few remaining sales associates will devote all their time and energy to Nieman Marcus-level service…and maybe, at that point, the displays will look good again.

Or, Macy’s could go the other route and just start competing with the few vendors that seem to have discovered a successful model in this economy: T.J. Maxx, H&M, Forever 21, Ross, and Salvation Army.

6 thoughts on “Department store downward spiral: at least the shelves are stocked.

  1. Chris B

    Even the Indianapolis Business Journal got into the act with a story entitled “Carson’s in Circle Centre is part of reeling department store firm”. And that’s another Simon mall. I have to say that the last time I walked through Carson’s it still looked well-merchandised (in contrast to the suburban Macy’s near me).

    In fairness IBJ also ran the story “Simon, Kite seek to dispel ‘retail apocalypse’ narrative”. They seem to suggest that higher end malls will do just fine. Nordstrom and Von Maur appear to be holding the high line locally; I didn’t go into Saks or Neiman-Marcus last trip to KoP but I suspect they will be OK too. High-touch, high-service is still a big and profitable niche, but it does speak to the increasing bifurcation of the US class and income structure.

    1. AmericanDirt Post author

      Like you, my experience with the Carson’s in Circle Centre is that it was well-stocked but totally unmaintained. Clothes strewn everywhere.

      I noticed that the Purdue expert in that IBJ article referenced the “bad locations” in describing Bon-Ton, the parent company of Carson’s. Succinctly and accurately put. From your time in Pennsylvania, you know as well as I do that Bon-Ton tends to dominate at the second-tier cities in PA (not metro Philly and Pittsburgh), but even then, it often is located in the “other” malls. Case in point: the greater Lehigh Valley has not one or two, not three or four, but FIVE Bon-ton locations: Macungie, Allentown (near Emmaus), Bethlehem, Easton (Palmer) and Phillipsburg NJ. Not one of them are the premier mall for the region, the Simon-owned Lehigh Valley Mall. Why, in this day and age, would a region that is well under one million people need five of the same department store? Throughout PA, they dominate in dinky malls to metros with 400,000 or less. They’re a staple of dead or dying malls.

      While I tend still to think the income bifurcation is at least somewhat overstated for political purposes, the fact remains that everyone who can engage in utilitarian convenience shopping via internet is choosing to do so. The only excluded population would be lower income people, not because they lack access to the internet but because they lack access to credit.

    1. AmericanDirt Post author

      Yeah, this mall seems to be holding up better than 90% of them–pretty typical of a Simon mall. If Macy’s continues to downsize, a high-performing location like this will be among the last to go. Malls with Nordstrom tend to perform well. But Nordstrom has no problem shuttering locations if they don’t meet performance standards (as they did in DT Indy back in 2011). A mall with two department stores (even as big as Pentagon City) can’t easily hang on when it loses just one.

  2. Rebecca B.

    My roommate used to park at this mall when she drove us to class from our Arlington apartment. (Corporate housing complex, not the cool old town area…) I remember it as the fancy mall…

    1. AmericanDirt Post author

      It’s definitely on the fancy side. But considering all the $$$ in the national capital region in general, there at least two (maybe 3 or 4) malls in MD and VA that are even fancier…


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