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Retail Shift From Department To Specialty Stores; Gimbels Closes

September 26, 1986

NEW YORK (AP) _ American shoppers are abandoning the big ″everything under one roof″ department stores in favor of smaller shops specializing in one type of merchandise and offering more convenience.

The recent closing of Gimbels, one of nation’s pioneer department stores, shows a growing shift away from supermarket-like stores that catered to everyone, but found they were pleasing few.

″The outlook for the conventional department store is one of fairly grim realities,″ says Kurt Barnard, a retail consultant. ″They won’t disappear, but they will become less and less important in the marketplace.″

While 1985 department store sales increased by only 4 percent over the previous year, specialty store sales grew by approximately 12 percent, he says, explaining that the number of specialty stores also grew dramatically during that period.

Gimbels, which has been holding final clearance sales for weeks and will close Saturday, decided to shut its doors after years of dwindling revenues. It marks the end of the legendary rivalry with Macy’s.

Ohrbach’s will shut its flagship Manhattan branch in February and Alexander’s will leave its prime location near Bloomingdale’s next year.

Price may be the draw of the discounters, but the convenience and service of specialty stores are especially attractive to working people. ″It’s time consuming to go downtown to shop in a department store, when you can find any specialty store you could want directly outside your office building,″ Barnard says.

Monroe Greenstein, a retail analyst for Bear, Stearns & Co. Inc., blames the department store closings on management mistakes, high overhead and failure to adjust to customers’ changing needs.

Profits from land sales provide an added temptation to get out of business, Greenstein said.

Earlier this month Gimbels sold its two Manhattan stores and a Queens warehouse for more than $150 million. The buyers plan to operate retail space on the lower floors of both stores, converting the rest of one building to office space and replacing another store with a residential tower.

Amcena Corp., owners of Ohrbach’s, will covert the 10-story building to offices and small stores. Alexander’s Inc. plans to redevelop its property as commercial space.

Gaining a larger part of general merchandise sales are newer chains such as Benetton and Labels For Less.

Some department stores are fighting back, cutting out furniture and other unprofitable durable goods, and concentrating only on clothes, said Greenstein.

Greenstein says Macy’s and Bloomingdale’s have been winning the department store battle with techniques similar to those of their specialty rivals: music videos flash the latest looks; the smell of David’s Cookies fills the air, and consumers can shop in a collection of designer boutiques including Calvin Klein, Missoni, Sonia Rykiel and Yves St. Laurent.

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