May to open 212 new stores by end of 2006
Tuesday, April 9, 2002
ST. LOUIS -- May Department Stores Co. plans to open more than 200 new stores by the end of 2006, pouring billions of dollars into expansion as the St. Louis-based retailer and its counterparts bid to counter the popularity of discounters.
May, which operates such stores as Lord & Taylor, Famous-Barr and The Jones Store, said in a Securities and Exchange Commission filing Friday it looks to open 62 new department stores and at least 150 bridal group stores over the next five years.
May said its $4.1 billion capital plan through then includes $1.6 billion investment in new stores, $1.2 billion to expand and remodel existing stores, and $370 million for systems and operations upgrades.
This year, May plans to open 11 new department stores, one-half the number of new stores it christened last year. The new sites will be in California, Florida, Kansas, Massachusetts, Missouri, North Carolina, Ohio and Texas.
May also plans to remodel 31 department stores this year, eight more than in 2001.
At the end of the fiscal year that ended Feb. 2, May had 439 department stores in 37 states and the District of Columbia, as well as 400 bridal group stores that include David's Bridal, After Hours Formalwear and Priscilla of Boston.
Despite reports of an improved economy, retailers -- notably department stores and mall-based apparel retailers -- have been pummeled by consumers' continued shift toward discounters. To woo shoppers, department stores have slashed prices but still have recorded sales declines.
Discounters to expand
Discounters continue to outperform the retail industry, generating strong sales gains with plans of their own for major expansion this year. Wal-Mart plans to expand its square footage by 9 percent this year, following an 8 percent gain last year.
Though May's SEC filing did not specify where the new stores would be added in coming years, Kurt Barnard of Barnard's Retail Trend Report said Monday he's curious whether the retailer planned any experimentation to challenge the strength of discounters or specialty stores.
Unless retailers can come up with a formula that will recapture and reattract the younger shopper, the department store is in a pretty murky soup, he said, adding that the nation's sluggish economy "has clearly aided and abetted the discounters at the expense of the department store."
Last fiscal year, May earned $703 million, or $2.21 a share, compared with $858 million, or $2.62, the previous year. Sales for the year were $14.22 billion, down 1 percent from $14.37 billion a year earlier when the period included an extra week.