department-stores
department-stores

Tony Spring Outlines Bloomingdale's Future

Executive talks about the challenges of the department store's “evolution.”

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Marc Jacobs' accessories.

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The exclusive DKNY capsule collection.

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There's a new face in the front row: Tony Spring, chairman and chief executive officer of Bloomingdale’s.

Since taking the reins in February, he’s been conspicuous on the fashion scene, attending New York and Paris fashion weeks, visiting showrooms to learn what’s new and dining with designers in Flip, the gourmet hamburger joint on Bloomingdale’s lower level.

“It has to start with the merchandise. If you don’t start with great product, we are not going to succeed,” Spring told WWD.

“As a new ceo, I thought it was really important to send a message that we really care about creativity and commerce. The fashion shows are an important component. It’s an important part of developing relationships and shows a level of appreciation and respect for the partnership and the brand. I want that emotional connection with what brands and designers are thinking. I attended the Paris shows. I want to try to go whenever I can, whether that’s a show or walking through Burberry to see what’s new. I want to underscore Bloomingdale’s commitment to fashion.”

Spring joined Bloomingdale’s as a trainee 27 years ago, became a home buyer two years later and advanced to the top marketing, stores and operations jobs. Now he’s wearing the merchant’s hat again, but it’s not like the program has radically changed from his predecessor and mentor, Michael Gould. “There’s an evolution, not a revolution,” said Spring. “I don’t think we need to sharpen our image — we need to sharpen our game.”

It’s his mission, he said, “to continue to build, to create a new sense of opportunity. This is not completely different” from the past. “It is the next chapter in the continued successful evolution of the Bloomingdale’s brand. Change is inherent in this business.”

Growth is still the priority. “It’s been judicious and comparable to other upscale stores” such as Nordstrom, Neiman Marcus and Saks Fifth Avenue, Spring said. Bloomingdale’s is profitable, with an operating profit rate at about 9 percent — just less than Nordstrom’s at more than 10 percent — and revenues reaching $3.2 billion in 2013, according to sources. The parent Macy’s Inc. does not break out Bloomingdale’s results.

Asked if the pace of growth will pick up, Spring responded unequivocally: “Yes. There is an opportunity to grow in all channels of the business. We are not limited by any one channel or concept to drive growth. We have a unique number of opportunities with the number of doors we have to have additional full-line stores, additional outlets, and there is an opportunity to grow bloomingdales.com, to grow internationally, and for the flagship. We have to be in key markets where Bloomingdale’s is not located,” Spring said, without divulging the areas under scrutiny. Among the likely targets are the Pacific Northwest, Arizona and Texas, where Bloomingdale’s has no department stores.

“We can have more stores internationally. I am not going to give you specifics,” Spring said. “We are not pressured to open 10 more outlets, or 10 international stores by tomorrow. Looking over the next five to 10 years, I would be surprised if Bloomingdale’s doesn’t have a larger international footprint.”

While certainly not one to overpromise on the future, Spring, in a conversation at his office on the seventh floor of the flagship, situated discreetly behind the towel department, opened up on how the team is taking the business to the next level and what’s on tap.

Among the biggest undertakings: the Sept. 10 launch of 100% Bloomingdale’s, presenting 1,000 exclusive styles and items from 100 designers and brands from around the world. Spring described efforts to get one-of-a-kind capsule collections pulled together as “a journey spanning the globe” with Bloomingdale’s buyers and fashion directors collaborating with designers, whether that meant an afternoon sketching looks with Donna Karan or building bracelets in Milan with Marco Bicego. Several leased concessions are participating for a break from the merchandising mold. With the Internet, and what many view as the commoditization of fashion, consumers can buy anything anywhere, challenging retailers to come up with differentiated products of their own.

“This is intended as an ongoing annual strategy — and it happened fast,” with the planning begun in February, Spring said. “This isn’t a campaign, it’s a strategy. There will be a lot of fun marketing, collateral, events, social media, direct mail, videos online and in taxis.”

Another project revealed by Spring: “The store of the future.” The 125,000-square-foot unit in Stanford Shopping Center in Palo Alto, Calif., when it opens in October, will represent an amalgamation of technologies and merchandise concepts and shops from existing Bloomingdale’s units, and some new ones. “This isn’t just a reopening,” Spring said. “We are viewing it as a new store, to present the best and latest thinking, to present more technology, and more brands that would be consistent with our downtown San Francisco flagship. We are trying very hard to create a much more powerful Bloomingdale’s expression. Technology meets humanity — that will be Stanford.”

Other openings set to happen — a 167,000-square-foot store in Ala Moana, Honolulu in fall 2015, and a 120,000-square-foot unit in the Mall at Miami Worldcenter, Miami, for fall 2016.

Bloomingdale’s has 38 stores including one overseas unit in Dubai operated by Al Tayer Group LLC under a licensing agreement. There are also 13 outlets. The Dubai store is performing well, which could lead to additional Middle East stores. Reports about Bloomingdale’s opening in China were flatly denied by a spokeswoman. Toronto has been scouted, though the right real estate hasn’t been found.

Bloomingdale’s fastest expansion vehicle could be a small store prototype, 80,000 to 100,000 square feet, that Spring said is under development. Bloomingdale’s has already put up smaller stores, in Manhattan’s SoHo and Santa Monica, Calif., for example. However, the latest thinking refines the format to enable the retailer to grab locations faster, have “fill-in” stores in markets where the company already has bigger stores, establish a template to tailor assortments to suit the needs of a local market and stay meaningful in the categories Bloomingdale’s sells, and generate enough productivity. At every location, the Bloomingdale’s identity needs to be maintained through its iconography and the mix of brand environments and classification areas, Spring said.

In addition, the ceo and his team are mapping out a rollout for the next wave of outlets beginning next year, developing a food concept for the sixth floor of the 59th Street flagship in New York and formulating a format for a shoe floor.

On the technology front, Spring cited a new mobile app launching this month so shoppers can shop easier, readily learn about the store and about product availability. There also are pilot programs in fit technology and with “smart fitting rooms.” The fitting rooms in a handful of locations are being outfitted with iPads so customers can read reviews on what they’re considering buying and signal associates to bring in additional styles or sizes. “We’ve got to test and learn” about new technologies, Spring said. “Some of it works and some of it doesn’t. Customers want things that are intuitive and don’t disrupt their normal shopping pattern.”

The buy-online, pick-up-in-stores rollout is completed and will be marketed, Spring said. “It gets them into the stores, leads to incremental sales and saves on the cost of delivery. This is right in the center of the bull’s-eye in terms of being an omnichannel operation.”

Macy’s Inc.’s chairman and ceo Terry J. Lundgren said Spring has a “customer-centric, intellectual approach” and a big part of the Bloomingdale’s ceo’s agenda in the last few years has been to elevate the customer experience, help associates build relationships with customers and omnichannel initiatives. So on the selling floor, Spring is not just sizing up the traffic or what’s selling. He’s noticing behavior, and not very pleased when he sees people glued to their mobiles. “How are you going to get people to look up?” is the unremitting objective.

Because customers are time-pressed and often riveted to their mobile phones, he’s been instructing the visual team to raise their game with impressions that get people to look up, that tell a quick story and that make it easier to drive conversion. “A mannequin is ordinary. Several together can make something extraordinary. We used to show two or three mannequins. Twelve mannequins grouped together is extraordinary. Ordinary things together can make for the extraordinary.”

He’s also encouraging the team to change displays more frequently, and mix it up on the mannequins to show outfits that aren’t brand-specific, so there’s a mannequin dressed in a Theory leather tank top and a Whistles midi skirt, for example, and another with a Maje sweater, Sandro lace blouse and a Reiss short. Brands don’t like to share the same mannequins, Spring acknowledges. “But it gives a real sense of how to wear it.…We are trying to ramp up our fashion leadership and authority.”

In a bigger sense, the objective is to become “a greater part of the cultural fabric of what’s going on, to be of the moment,” Spring explained. “We have to be talking about what’s exciting, dominant brands, the newest emerging labels and luxury. We must be talking about trends of the moment, events in customers’ lives that influence why people buy — everything from the Super Bowl to National Yogurt Day. Grandparents Day — we might do it.”

The year-and-a-half-old Bloomingdale’s calendar, Fashion-Packed Life, calls out all of what’s going on at the store, as well as community events where the stores are located, be it a designer appearance, a fragrance launch, a beauty promotion, or a charity fund-raiser. And it helps to get shoppers to take notice. As Spring noted, Fashion-Packed Life appears online, in print, on mobile, and as a tall display in the store.

“It’s part of that wink, that we are in the know and on top of what’s going on,” said Spring. “Look, we’ve got John Varvatos’ birthday listed. And there’s Vince launching men’s shoes. It makes you look, tells a quick story. It gives you a flavor of things going on in Bloomingdale’s, in a snapshot. People are very intrigued to be in the know. People expect brands to be more authentic. We have to do things that earn that right, to become relevant in a big important way.”

NEXT: Spring-isms >>

 

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