October 27, 2015
Lord & Taylor is the latest to take the off-price route
Lord & Taylor is joining the likes of Kohl’s, Macy’s, Nordstrom and Saks Fifth Avenue with the launch of its own off-price format next month.
The new concept, named Find @ Lord & Taylor, will debut at the site of a former Loehmann’s store in Paramus, NJ. According to reports, the new concept will feature merchandise evenly split between clearance items and off-price goods. The 35,000 square-foot store will sell clothing for women, men and kids, and home furnishings, as well.
The decision to open the concept was made easier by the success of sister company Saks’ own off-price concept called Saks Off Fifth.
"We’ve been growing quite rapidly and profitably with Saks Fifth Avenue Off Fifth," Jerry Storch, CEO of Hudson’s Bay Company, which owns Lord & Taylor, told The Record. "We have a fantastic, skilled team who knows exactly what they’re doing and how to succeed in the off-price business," he said.
Photo: RetailWire
In an interview with The Wall Street Journal, Mr. Storch said the new off-price concept would appeal to a different set of consumers — younger and starting families — than those who shop at Lord & Taylor’s flagship department stores.
The first Find @ Lord & Taylor will be followed by six additional locations next year.
BrainTrust
Joan Treistman
President, The Treistman Group LLC
Recent Discussions
Discussion Questions
Will Lord & Taylor’s relative late entry into off-price retailing prove to be an advantage or disadvantage for the company? Will the continuing proliferation of off-price concepts come back to bite the department stores that have launched them?
Poll
When I saw the original story, I didn’t think about lateness or advantages or disadvantages. I thought about how everyone is doing it — joining the move to off-price retailing. Then I thought that soon everyone will look the same as they did before — only in off-price retailing. Too bad that Filene’s and Loehmann’s couldn’t hold on. Everything old is new again.
The off-price retailing movement reflects the shift in how and where consumers are buying today. I don’t think we’ve overshot this trend yet.
When the time was right and the money was there companies focused on upper-middle income and above and missed the opportunity to explore e-commerce and brick-and-mortar global expansion. Now many of these companies are financially limited to embrace the once fruitful malls in America again thanks to poor vision and long-term facility leases/ownership. With insufficient talent and funding the search is on for finding dignity in the off-brand and used clothing markets. Their future is now in a place where they are not familiar with the market and its opportunities and are generally over looked by the consumer. It will be difficult for seasoned investors to support market plans like this with early funding and long-term support.
Off-price concepts have a long history by now. Outlet shopping mavens know all about that special line created for those stores.
I don’t think Lord & Taylor will suffer from this initiative, especially if there is a time lag with what is available “in season.” Their new Paramus store will be within a mile or two of their longstanding Garden State Plaza location. It gives them an opportunity to very easily monitor the direct impact of the off-store concept.
During the height of the recession we had discussions about getting back to “normal” pricing. I think Lord & Taylor is demonstrating the reality of the “new normal.” Off-price retailing off-line and online is an option for consumers who want it and/or need it. I don’t see it ending any time soon.
Mall anchors in most B, C and D malls are like the malls themselves — toast. So are the specialty shops in between them. There are just too many square feet and mediocre stores for a market that, over 20 years, has lost its spending power and appetite for specious fashion.
Enter the “off-price” store.
And this ditch-to-ditch swing is just a perilous. Those mediocre department stores will beget mediocre off-price stores.
TJX magic isn’t just a parlor trick. Meyerowitz built a powerful team and business model. The core strengths of department stores do not necessarily lend themselves to the creation of a wholly new business. This could be a distraction for all that are jumping on the “off-price” bandwagon.
Will these new outlets drive incremental sales? Or are they an effort to retain share of wallet? We’ll see …
Or as we like to say, “retail ain’t for sissies!”
Okay, I am dating myself. Twenty five years ago I used to visit the sole Lord & Taylor clearance center in suburban Chicago on my lunch hour. It was spartan, but clean and organized. The racks were filled with the recent season left overs from all the primary L&T stores around the city. (I think there were about 8 stores at the time.) The items carried their original tags and wore the sale price stickers that clearly told the history of the item’s price in the primary store. Then the price was rung up at 50% of the previous final price. I can’t tell you how many times I was able to complete an entire work outfit of Evan Picone or Jones New York because all the size 8’s were consolidated at the clearance center for my convenience :). But I still purchased plenty of stuff at the mall and downtown L&T stores.
Current outlets, most of which seem to carry obvious outletty, specially manufactured items — often of lesser quality — have little appeal to me and my shopping buddies. Lord & Taylor knew how to do it in the past and that may be its advantage. I hope they do it right this time around. Even outlets need differentiation in this crowded market segment.
I think it’s certainly worth a try for Lord & Taylor. It’s a good way to clear out clearance items and appeal to new customer segments. Also, if the retailer has an outlet for discounted items, it can focus on strengthening the price perception at its full price stores.
I think there is a significant danger that the off-price versions become unable to bring those customers into the main brands. Look at how much trouble Gap is having while Old Navy thrives.
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When I saw the original story, I didn’t think about lateness or advantages or disadvantages. I thought about how everyone is doing it — joining the move to off-price retailing. Then I thought that soon everyone will look the same as they did before — only in off-price retailing. Too bad that Filene’s and Loehmann’s couldn’t hold on. Everything old is new again.
The off-price retailing movement reflects the shift in how and where consumers are buying today. I don’t think we’ve overshot this trend yet.
When the time was right and the money was there companies focused on upper-middle income and above and missed the opportunity to explore e-commerce and brick-and-mortar global expansion. Now many of these companies are financially limited to embrace the once fruitful malls in America again thanks to poor vision and long-term facility leases/ownership. With insufficient talent and funding the search is on for finding dignity in the off-brand and used clothing markets. Their future is now in a place where they are not familiar with the market and its opportunities and are generally over looked by the consumer. It will be difficult for seasoned investors to support market plans like this with early funding and long-term support.
Off-price concepts have a long history by now. Outlet shopping mavens know all about that special line created for those stores.
I don’t think Lord & Taylor will suffer from this initiative, especially if there is a time lag with what is available “in season.” Their new Paramus store will be within a mile or two of their longstanding Garden State Plaza location. It gives them an opportunity to very easily monitor the direct impact of the off-store concept.
During the height of the recession we had discussions about getting back to “normal” pricing. I think Lord & Taylor is demonstrating the reality of the “new normal.” Off-price retailing off-line and online is an option for consumers who want it and/or need it. I don’t see it ending any time soon.
Mall anchors in most B, C and D malls are like the malls themselves — toast. So are the specialty shops in between them. There are just too many square feet and mediocre stores for a market that, over 20 years, has lost its spending power and appetite for specious fashion.
Enter the “off-price” store.
And this ditch-to-ditch swing is just a perilous. Those mediocre department stores will beget mediocre off-price stores.
TJX magic isn’t just a parlor trick. Meyerowitz built a powerful team and business model. The core strengths of department stores do not necessarily lend themselves to the creation of a wholly new business. This could be a distraction for all that are jumping on the “off-price” bandwagon.
Will these new outlets drive incremental sales? Or are they an effort to retain share of wallet? We’ll see …
Or as we like to say, “retail ain’t for sissies!”
Okay, I am dating myself. Twenty five years ago I used to visit the sole Lord & Taylor clearance center in suburban Chicago on my lunch hour. It was spartan, but clean and organized. The racks were filled with the recent season left overs from all the primary L&T stores around the city. (I think there were about 8 stores at the time.) The items carried their original tags and wore the sale price stickers that clearly told the history of the item’s price in the primary store. Then the price was rung up at 50% of the previous final price. I can’t tell you how many times I was able to complete an entire work outfit of Evan Picone or Jones New York because all the size 8’s were consolidated at the clearance center for my convenience :). But I still purchased plenty of stuff at the mall and downtown L&T stores.
Current outlets, most of which seem to carry obvious outletty, specially manufactured items — often of lesser quality — have little appeal to me and my shopping buddies. Lord & Taylor knew how to do it in the past and that may be its advantage. I hope they do it right this time around. Even outlets need differentiation in this crowded market segment.
I think it’s certainly worth a try for Lord & Taylor. It’s a good way to clear out clearance items and appeal to new customer segments. Also, if the retailer has an outlet for discounted items, it can focus on strengthening the price perception at its full price stores.
I think there is a significant danger that the off-price versions become unable to bring those customers into the main brands. Look at how much trouble Gap is having while Old Navy thrives.