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Don't bury the department store; the heart's still beating

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Funny things happened to characters in Alfred Hitchcock's movies.

I was watching “Vertigo” one recent snowy Sunday. Haunting! There was that haunting ending, at the top of a mission bell tower. (Not to give away too much, but someone fell.) There was that haunting Bernard Herrmann score.

But the most haunting of all was when Jimmy Stewart wanted to re-wardrobe Kim Novak. He took her to Ransohoff's Department Store on San Francisco's Union Square, where a team of saleswomen and a parade of models gave Novak and Stewart a private fashion show.

That was 1958. Ransohoff's is gone now. Not a victim of an ill-advised shower in a seedy motel. Nor done in by a flock of overstimulated birds. Just vanished.

Gone, too, is that level of personal service and fashion elegance for which department stores were known. Today, think of a downtown department store and you think of – what? Abandoned real estate turned into condo lofts? Or large, unfocused retail space trying to limp along on commodity brands and markdowns?

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Downtown department stores didn't just disappear one day, mysteriously. They were part of a long-evolving, systematic rub-out, beginning with suburban expansion and then a series of villains: the economies of chain retailing; the rise of designer fashion brands and then brand concept shops and then the brands' own stores; some mismanagement (can you say “Campeau”? “BATUS”?); the rise of discount retailing; the decline of seasonal shopping; and, that most chilling of all bad guys, the consistent 15 percent-off sale.

But a corpse? Kevin Roche doesn't think so.

“You only need to spend some time on any Saturday on Union Square in San Francisco,” Roche told me, talking about his town, “at the Macy's West, Neiman Marcus or Saks Fifth Avenue flagships. You will witness the relevance of revitalizing the 'urban vertical store of departments.' “

Roche knows department stores. He began his career in Federated's store planning department some 25 years ago, before going on to a distinguished retail design career. He was a principal of Space Design Intl., the “R” in FRCH, ceo of Fitch:Worldwide. Now he's with RYA. That's a lot of retail experience!

“I think,” says Roche, “that department store executives have to look at their square footage and ask, 'What's the best use of this space?' The answer may no longer be high-margin apparel that no one wants. It may be developing other tenant strategies that challenge the traditional viewpoint of what a department store is.”

They may get a higher return, Roche suggests, by inviting other businesses into those spaces. “In years past, department stores invented businesses by categories. They had their own restaurants, their own fine and gourmet foods, they were in stationery, in books – all of which they gave up.”

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Think of the $4.5 billion salon/day spa industry. “When I started my career with Federated,” he says, “every store had a salon. But they gave them up because they were not creating the kinds of margins a Tommy Hilfiger or Ralph Lauren shop could.

“Imagine what would have happened if a department store had invented an Aveda or a Sephora or a Cheesecake Factory or a Pottery Barn. When they diminished merchandise categories like those, they created competitors that they're fighting today.”

Hitchcock would have called that a self-inflicted wound. But maybe not a fatal one.

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