Belk’s clothing and furnishings DMM Tom Nystrom and VP of planning Selena Hanks use teamwork and testing to move the business forward.
Tom Nystrom, men’s clothing and furnishings DMM, and Selena Hanks, VP planning, have their hands full with over 10 categories under their jurisdiction: suit separates, sportcoats, dress shirts, ties, topcoats, rainwear, all furnishings including accessories and gifts, main floor pants, shorts, outerwear and Big & Tall. Still, they’re enthusiastic to talk to us about their businesses. And why wouldn’t they be? Suit separates are up 61 percent and sportcoats 25 percent compared to four years ago. “We’ve had consistent 20 percent increases back to back,” touts Nystrom. “We saw an underpenetrated separates business and chased it until it came into fruition.”
Separates are now 85 percent of the business (vs. 15 percent in nested, in only 28 doors). However, Nystrom’s constantly looking for new opportunities and tells us he’s planning a return to nested. “It may counter what’s been happening, but we focused so much on the volume part of the business that now we need to nurture the better part. We want to change the landscape in our 12 flagship doors by bringing in all new nested tables and showing complete outfits, things we’d walked away from.” Belk’s nested brands include Hugo Boss (sells at regular price in top doors!), Hart Shaffner Marx, Tommy Hilfiger, Lauren, Calvin Klein, Kenneth Cole and Michael Michael Kors. They’re launching Bobby Jones for spring ’14 and Vince Camuto for fall ’14. Ticket prices range from $350 to $895.
According to Nystrom, other tailored success stories include their new Made Cam Newton collection. From the planning perspective, Hanks says they made sure the store profile was fitting. “We didn’t put it in every door because we knew it wouldn’t work everywhere.” Nystrom adds, “You can’t force something that’s going to compete with something else. You have to find the niche that makes sense.”
Hanks adds that replenishment has been a huge growth area. “We’re up double-digits again over last year,” she says. “And healthy margins are attached to that. There’s no general rule on replenishment vs. fashion—we base it off of history and opportunity. Last year we grew replenishment again on top of double-digits the year before, so we may be at plateau right now with some areas, but we still have opportunities like Big & Tall. The places that don’t have a strong foundation are where margins have been challenging: those are the areas we need to push.”
When asked what other challenges they face in tailored, Nystrom admits, “The fashion business is a problem because it goes out the door at much less than the ticket price. At the end of the day, you sell [nested] suits for a little under $200, and suit separates for a little more. We sell a Lauren suit separate for $245 out the door and turn it. The difference is one is replenishment, one is fashion. Fashion can be hit or miss: you need marketing to get the guy to come in. So it’s understandable why suit separates have become a bigger play. It’s 1.5 times bigger than when I first started and our pants to jacket ratio is one to one. Eventually we’ll try to do a little higher-priced separates business as the market continues to evolve. The problem is achieving economy of scale.”
Vests are a part of Belk’s healthy separates business (averaging $39.99 OTD). “Geoffrey Beene is our number one in suit separates, and we basically sell one vest for every other suit,” Nystrom says. “We’re also selling a lot of black vests as singles, to wear with jeans. When it gets a little warmer, you still want to look dressed up but you don’t want to wear a jacket, so you wear a vest.”
Going forward, Nystrom says sportcoats will continue their upward trajectory. “The biggest thing is that new blue—it was the color of the season. Orange was a great color last year. In the fall it was wine. Next year we’re going after deep blue velvet, not black velvet because while you may think you can sell it, it’s not an all-door color anymore. Corduroy does well because it’s worn as outerwear. Private brand makes up about 50 percent of our suit separate and sportcoat businesses. We’re also dabbling in Tallia’s extra-slim-fit suit separate. We establish a core and then sprinkle in fashion.”
According to Nystrom, neckwear at Belk is a huge private label business. Saddlebred is an important brand in both ties and bow ties while Madison is only ties. Madison comprises skinny (2 to 2.75 inch) ties with tie bars and traditional (3.25 inch) ties. Bow ties are huge for Belk: they sold 250,000 bow ties last year. About 20 percent are pre-tied and the majority of the volume is private label. “We sell Tommy, Izod and Lauren too, but our customer is less worried about the brand name on a bow tie.”
Nystrom says dress shirts at Belk are an underpenetrated category. “It’s a challenging business to grow because there aren’t a lot of options to drive sales. Unless there’s a new brand or a big change in fit (we’ve gone through the evolution to slim), there’s just nothing else that pushes the needle.” As a way to spice things up, they brought back Tommy Hilfiger for fall ($69.50 ticket, high $30s OTD) and are reporting nice growth. Another new addition is Brooks Brothers, which will be in seven doors for spring ($92.40 ticket, three for $225 promotional price). According to Hanks and Nystrom, the number one dress shirt at Belk is an Izod white button-down, CVC twill 60/40 blend, ($50 ticket, $24.99 to $29.99 OTD). “We sell a lot of button-down collar shirts because it lends itself to sportswear. A smaller store will sell tons of these because a guy can wear it as a dress shirt or sportshirt,” adds Hanks.
While pants business has been challenging across the board, Nystrom says, “If you look at mid-tier and better department stores, we out-perform them by 50 percent in men’s pants.” They’ve been able to maintain that through multiple sales/BOGO promotions and the change in fit from classic to modern. “Four years ago we were probably 80 percent classic fit, and now we’re 20 percent classic fit,” explains Nystrom. “Straight fit is the new norm, slim-fit has grown in importance but I think it will level out. If a guy’s on the edge of being a little bigger it can be uncomfortable—it’s that fine line—and works for the guy who truly is slim.” Belk differentiates itself from competitors by stocking different brands. For example, they do very little in Dockers. Instead they carry brands like Izod, Haggar and Savane, as well as a little private label. AUR for pants is in the high $20s. Nystrom notes they also have a strong better tailored pants business comprising wools and mid-weights. They’re also planning to layer in better dress slacks with unfinished bottoms.
Nystrom and Hanks both have strong retail resumes. Hanks has been with Belk for over 20 years. “I started when there were 15 different divisions. I’ve been in men’s, women’s, kids and Big & Tall. I started in men’s collections about seven years ago.” Nystrom worked at Filene’s until the end of May Company in 2006. That’s when he relocated to Charlotte as a buyer for Belk. He was promoted to DMM three years ago and still loves every minute of it.