Department store competition ratcheting up

Monday, March 21, 2005

With the opening of Kohl's and Sears Grand looming, other department store managers in the area say they aren't quaking in their wing-tipped shoes at the thought of increased competition.

They're fighting back.

Two of the larger department stores, J.C. Penney and Famous-Barr, are planning multimillion-dollar remodeling projects this year, in moves they call fortunate coincidences.

"It's not totally in reaction to Kohl's," said Famous-Barr manager Sharon Ebersohl. "We already had it in the works that we would remodel in May and have the work done in early fall. But when we heard Kohl's was coming, let's just say it was good timing on our part."

Famous will be getting new cosmetic bays, new flooring and other work as part of what Ebersohl called "a facelift."

"We're making the store look more exciting," she said. "But we need customers' patience while we're remodeling. That's what we're most scared about."

But Ebersohl said she welcomes the competition that Kohl's and Sears will bring.

"It's great," she said. "It will bring more people to the area. They don't just shop at one place. They go to several places to shop. Competition is good. We're looking forward to having them here."

J.C. Penney manager Gary McDowell said he expects to see a dip in profits at his store at first.

"You lose some in the beginning," he said. "But then you start getting some of that business back. We just stay the course."

McDowell said the store's major remodeling project wasn't a new idea.

"It was needed anyway," he said. "But with the competition coming, it doesn't hurt. I've been asking for this remodel for four years. Kohl's coming probably helped them turn the money loose for us. We've been turned down every year until now."

Neither McDowell nor Ebersohl would give the exact costs of their projects.

McDowell said Penney's is getting new carpet and tile and that the store will be painted. The jewelry department also will be updated. He hopes the work, which also starts in May, will be done before August.

Managers at Kmart and Target declined comment.

Dr. Bruce Domazlicky, director of the Center for Economic and Business Research at Southeast Missouri State University, said a reduction of profit for existing department stores is always a possibility.

"There is that double-edged sword," he said. "One side is that more stores in one area make it more attractive for people to come here. Customers may travel further if there are more alternatives, opportunities and choices. It may increase traffic."

But Domazlicky said there's another side.

"It will divert some people to the new stores," he said.

No matter how it turns out, Domazlicky said one group will certainly come out a winner -- the consumer.

"It keeps prices from rising very fast and it gives them more choices," he said. "Consumers like that."

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