May Co. Focuses on Luxury

Retailer Pushing Higher-End Products for Holiday Season

By Cecile B. Corral -- Home Textiles Today, 11/15/2004 12:00:00 AM

St. Louis —

The May Department Store Company is positioning itself this holiday season as a luxury gift shop, focusing on higher-end products that center on fashion, not functionality, the company reported during its third quarter conference call last week.

“Our gift assortment has been carefully edited to simplify shopping and offer authoritative selections in gift to our shoppers,” said William McNamara, vice chairman.

Among such items in the home department are down comforters, McNamara pointed out. Other highlights include high-tech electronics, personal spa-related and massage products, layering apparel goods and women's accessories like brooches and diamond jewelry.

Supporting this push is a revamped marketing plan, which this year converts dollars from print to broadcast advertising. For the second consecutive year, the company is running its TV ads featuring animated gift boxes. Also, this year's slogan is “Gifts that excite.”

“We are focused on registering powerful must haves to make our gift assortment distinctive and authoritative,” McNamara said.

May's effort to become a luxury gift destination falls under a greater initiative the company has implemented to improve performance overall. Its five key “sales getting” points are: deliver fashion and newness faster, identify new traffic generators and reestablish the company as a gift headquarters, grow proprietary brands, attract younger customers and eliminate unnecessary duplication of products.

Already, the company has made strides in related improvements. Point-of-sale equipment has been upgraded in 59 stores over the past few months with strong results — including the reduction of transaction time by about 20 percent.

By next fall, all of May's stores will be equipped with this new system.

Secondly, after testing price checkers in several stores earlier this year with favorable reception from shoppers, the company is rolling out these machines in all of its full-line stores in time for the holiday selling season and in all Marshall Field's stores next spring.

Finally, overhead directional signage has been added to 60 stores and will be in 133 stores by the end of next spring.

Regarding the third quarter, which proved a period of weak performance for the company, women's and men's fashion apparel and accessories were bright spots in comparison to home and back to school products.

“The positive momentum in (the apparel and accessories) areas was offset by a difficult trend in home store. And our back-to-school sales were mixed,” McNamara said.

Buoying the quarter with higher margins were two elements related to improved content and increasing markup activity, said Thomas Fingleton, executive vice president and chief financial officer.

“The content is more current than was in past, and there is a bit more pricing power this year than last year and we've had some modest gains in initial mark-up,” he explained.