July 27, 2021

New store will offer fewer products, but update its selection multiple times a week

Department stores such as Nordstrom Inc. and Macy’s Inc. have been experimenting with smaller locations as many of their traditional, cavernous stores have been crushed by competition from online shopping.

Now Bloomingdale’s, a unit of Macy’s, is getting into the act. At the end of August, the company is planning to open its first smaller-store concept, named Bloomie’s.

The 22,000-square-foot store in a suburban shopping district in Fairfax, Va., will carry far fewer products than traditional Bloomingdale’s stores, which average around 150,000 square feet. But the retailer is hoping that it will attract customers by offering a more thoughtful selection of goods and services.

Bloomie’s also will update its selection of clothes, beauty products and accessories multiple times a week. The Fairfax location will have more open spaces than a traditional department store and will house a Colada Shop, a Cuban cafe serving drinks and food like empanadas and Cuban sandwiches.

The new store offers “a more convenient and casual concept that fits into the everyday lifestyle needs of our customer,” said Tony Spring, chief executive officer of Bloomingdale’s. “We want Bloomie’s to be their neighborhood store.”

Other new smaller format stores include Nordstrom Local which was launched in 2017 and now operates in seven locations in California and New York. Target first started opening smaller stores in urban areas in 2012, and has been expanding its portfolio of smaller locations ranging between 15,000 square feet and 40,000 square feet in college towns.

These stores try to complement as well as compete with online retailers. Most offer same-day delivery and pickup of online purchases and smooth return procedures for goods bought online. Some even offer stylists for shoppers who want personalized service.

“What the last several years have taught us is that retailers need to be keenly aware of how to reach customers,” said Daniel Hurwitz, founder and CEO of Raider Hill Advisors, a private retail real-estate investment and advisory firm.

Some bricks-and-mortar retailers were born during the age of online shopping. For example, a startup named Neighborhood Goods currently has three locations ranging between 4,500 and almost 14,000 square feet in Texas and New York City that mostly offer rotating selections of internet-native brands.

Others like Bloomie’s are using food to create a young and hip vibe. “You can walk around the store while sipping a cocktail, or grab your girlfriends and go to the shoe department,” said Daniella Senior, co-founder and CEO of Colada Shop, which will occupy around 1,000 square feet including patio seating.

But the launching of smaller stores isn’t going to provide much relief for owners of malls and other shopping centers that have seen rents, values and occupancies dwindle. Most of the new stores don’t want to be in malls. Rather, they are opting for locations in downtowns or suburban shopping centers with more of an open-air feel.

Smaller stores also aren’t coming close to making up for the closing or contraction of some of the biggest bricks-and-mortar retailers in recent years. Bloomingdale’s, which operates 54 U.S. and outlet stores, earlier this year closed a store in Santa Monica, Calif., and last year, a store in Chicago.

Many of the new smaller stores are still in the testing phase. Bloomingdale’s hasn’t said when it plans to open more Bloomie’s.

Macy’s introduced a smaller format, Market by Macy’s, in the last two years, in Fort Worth and Southlake, Texas, and is planning three others in Dallas and Atlanta. The Southlake location closed earlier this month for refurbishing, and Macy’s plans to reopen it in the fall with a brighter and more open shopping environment, said Blair Rosenberg, a company spokeswoman.

– Esther Fung