Department Stores

Brief Excerpt from Industry Overview Chapter:

Companies in this industry operate physical retail establishments that sell items such as clothing, cosmetics, footwear, and home furnishings, typically from registers within individual departments. Major companies include Dillard's, JCPenney, Macy's, and Sears (all based in the US), as well as Debenhams and Marks & Spencer (UK), El Corte Ingles (Spain), Galeria Kaufhof (Germany), Galeries Lafayette (France), and Tokyu Department (Japan).

Worldwide, the department store industry has revenue of about $400 billion, according to Global Industry Analysts. Department store sales have typically been strongest in Europe, Japan, and the US.

The US department store industry includes about 20 companies that operate about 3,500 stores with a combined annual revenue of about $60 billion and is expected to see revenue decline in the next two years. Key challenges for the industry include consumer spending habits and changing fashion trends.

Department stores differ from discount department stores in that most department stores have checkout registers within individual merchandise departments instead of a central checkout area. A separate Discount Department Stores profile covers that industry.

COMPETITIVE LANDSCAPE

Consumer spending and fashion trends drive demand. The profitability of individual companies depends on effective merchandising and marketing. Large companies have advantages in purchasing, distribution, and marketing. Small companies can compete effectively by offering unique merchandise, providing superior customer service, or delivering a distinctive store experience. The industry is highly concentrated: the top eight companies generate about 95 percent of industry revenue.

Department stores compete with discount...