A well-known ad in glossy fashion magazines regularly asks, ”What becomes a legend most?”
It`s a question that owner Batus Retail and executives at Chicago`s venerable Marshall Field & Co. have been asking for nearly two years as they struggle to rejuvenate the onetime Dowager of State Street.
This weekend, Chicagoans, for whom Fields has been as much a civic institution as a retailer for 133 years, got to see part of the answer. Four stars from NBC-TV`s red-hot ”Miami Vice” series launched a joint, first-of- its-kind promotion for the store`s fall season.
Thousands watched a huge, noisy State Street motorcade honoring Chicago police and led by Mayor Harold Washington and the ”Miami Vice” stars. Warming the cockles of a retailer`s heart, thousands also streamed into the State Street flagship store afterward to collect autographs, stargaze–and ring in the new season at the cash registers.
Prominently showcased on the State Street side of the first floor, the
”Miami Vice” crowds could see more of the answer to what becomes a legend.
Sleek new boutiques for Fendi, Bottega Veneta, Chanel and Louis Vuitton, in which prices start at $300 and $1,230 beaded sweaters are the order of the day, recall the retailer`s glory days as the city`s fashion leader.
”We wanted to bring back the idea that Marshall Fields is the first to introduce anything of quality, style and substance to Chicago–this isn`t theater for theater`s sake,” said Fields Chairman Philip Miller, hired from Neiman-Marcus in 1983.
”All this hullabaloo is really great; it`s what they should be doing,”
said John Landschulz, an analyst with Mesirow & Co. in Chicago. ”It`s a traffic builder, and that`s what counts in this kind of competitive environment.”
But Gary Witkin, Fields executive vice president, also sees the promotions and the specialty boutiques as a way to retain the retailer`s traditional customers. ”If we create excitement and newness, it makes the customer who already shops with us feel good about shopping here,” he said.
Partly as a result of its new merchandising pizazz, partly as a result of $70 million that Batus Retail, a subsidiary of Britain`s giant B.A.T Industries, reportedly has poured into store renovations and new systems, Fields` bottom line has taken on a healthy new glow under Miller.
Acquired by Batus in the depths of the 1982 recession, when trade sources estimated its profit margin at less than 5 percent, sales at Fields` 21 stores increased 8 percent to $750 million in 1984. More importantly, pretax profits jumped 12 percent to approximately $52 million.
Miller also says Fields has regained its 15 percent share of the metropolitan Chicago market, which at one time had slipped as much as a percentage point, which is worth several million dollars in sales.
Miller, 47, credits Batus` cash infusion and understanding of the retail business (Batus Retail also operates Saks Fifth Avenue, Gimbels and several smaller retailers) for much of Fields` new health. He predicts that the retailer will post sales of $1 billion with a profit margin of 11 to 12 percent by 1990.
”Your report card from your customers is your sales volume and whether or not you`re holding your market share,” Miller said. ”In terms of the efficiency of management, the report card is your profit line.”
The 1984 figures have left Miller–whose crowded ninth-floor office, with its red silk moire wallpaper, reeks of Elegant Chic–so confident that Fields executives are beginning to talk about expansion.
Last week, the company announced that construction would begin immediately on a new store in San Antonio, its fourth in the highly profitable Texas market and its first new store in several years.
Fields President Burnett Donoho, recruited by Batus from its Gimbels-Midwest division in Milwaukee, says Fields also is looking at new markets in other areas of the country, roughly ”a few miles on either side of a line from Houston to Chicago.”
”Our name recognition in the Midwest is huge, and anytime you have that much recognition, you`ve got to consider building stores,” Donoho said with a Kentucky drawl. ”We`ve got the support (from Batus) to build additional stores in the next few years, but we`ve got no locations yet.”
Trade sources have speculated, however, that six markets are prime contenders for the new stores, including Columbus, Ohio; Indianapolis; Tulsa; and Kansas City, Mo.
Though Fields still is Chicago`s dominant retailer, it is being severely tested by competition from a newly awakened and aggressive Carson Pirie Scott & Co., from recently upgraded mass merchants such as Sears, Roebuck and Co. and J.C. Penney Co. and from cheaper discounters and off-price merchants.
”Fields remains dominant with the premier image among the most valuable shopper segments in the market,” said a recent report on the Chicago retail market. ”Carsons` strength is slightly more evident among the moderate-price, less fashion-oriented groups.”
Fields` dominance extends beyond market share.
”You can`t get some designers` trunk (fashion preview) shows because Marshall Fields has them sewn up,” said Larry Gore, who leads a group of high-fashion specialty stores that includes Stanley Korshak, Ralph Lauren Polo and Brittany Ltd. ”You ask them if they wouldn`t rather sell to a very exclusive specialty store, and they say no, they want Marshall Fields. They want that name in Chicago.”
Batus Retail Chairman Arnold Aronson, who once headed Saks Fifth Avenue, couldn`t be more pleased at that, as well as at promises that Batus will continue its heavy rate of investment–$100 million for the five years ending in 1988–in its newest acquisition.
”We had an obligation not just to purchase Marshall Fields but to put our blood and guts and investment into it,” Aronson said in a telephone interview from his Rockefeller Center office in New York. ”I`m very pleased with both the substance and the style of what`s happening there. They`ve gone back in a contemporary way to the roots of what made Marshall Fields.”
To do that, Miller spearheaded a two-pronged merchandising strategy of what he calls ”differentiation and dominance.” Differentiation involves cultivating specialty boutiques such as Fendi, Vuitton, Chanel and Bottega Veneta, part of what Fields refers to as its ”better-best” (quality)
designer business, which reportedly averages sales of $500 a square foot, $150 a square foot above planned levels.
”The better-best category is what differentiates us from most department stores in the rest of the country, which stop at the middle levels,” Miller said, adding that he would like to see the category account for 25 percent of sales. ”I think we`re the only department store that really does compete with the fine specialty stores.”
However, Miller, who calls the boutiques ”grace notes,” is careful to point out that most of Fields` new merchandising efforts have been devoted to strengthening the stores` upper-middle business, which currently accounts for 50 to 55 percent of sales.
Special boutiques, such as one for Esprit apparel in juniors, have been added in these areas as well, but Miller has emphasized efforts to dominate the market by placing huge merchandise commitments with key resources such as Liz Claiborne women`s apparel ($10 million sold last year), Health-Tex children`s apparel, Estee Lauder cosmetics and Hickey-Freeman men`s wear.
”The shops are like the model rooms on the eighth floor,” said George P. Kelly, former chairman of Fields and now owner of Mallards men`s clothing stores. ”They create a feeling, an ambience, but there are still a lot of $400 and $500 sofas up there where you do your volume.”
To concentrate on the differentiation and dominance, Fields has eliminated its budget business. Instead of a low-priced lineup created especially for one floor, the store`s basement has become a 1950s`-style mishmash of clearance sales for everything from furniture to candy to apparel. All that will change, however, when construction begins this month on Fields` long-postponed Pedway (which connects with the city`s underground walkway system) of trendy fast food shops, newspaper stands and flower stalls under Randolph Street.
”We couldn`t be dominant in the budget business because of the competition from discounters and off-price retailers, and I didn`t think the merchandise was up to the quality and taste level of Marshall Fields,” Miller said of one of his first decisions as chief executive.
Fields is coy about its plans for the 140,000-square-foot basement adjacent to the 20,000-square-foot Pedway, although Miller hints of
”compatible” departments for electronics, books and housewares, as well as restaurants. Donoho admits that a Macy`s-like environment of trendy shops is a possibility if it would appreciably raise the State Street store`s
”good-but-not-great” average sales of $200 a square foot.
”We`re not looking to duplicate someone else, but we`re sure not too proud to get an idea from someone,” he said.
The Pedway, in fact, is the least of the renovations and remodelings that have turned many Marshall Fields stores into construction zones in the last year and a half.
The State Street store, the country`s second-largest retail store, is a never-ending remodeling job, Donoho said with a sigh, adding that Fields
”might consider” cutting back some square footage there as long as it doesn`t change the feel of the ”grand old store that it is.”
