Did Twin Cities frugality lead to Bloomingdale's demise at MOA?
- Blog Post by:
- January 10, 2012 - 6:27 PM
No one really wants to be called cheap. Price savvy, yes. Frugal, maybe. We'd like to think we possess the taste if not always the money for the finer things in life.
So how do we explain the shrinking pool of large format luxury retailing in the Twin Cities, a region that actually enjoys good incomes along with affection for art museums, concert halls, and theater?
Dave Brennan, a professor of marketing and co-director of the Institute for Retail Excellence at the University of St. Thomas, described Twin Cities shoppers "falling back" from upscale stores.
Case in point: Bloomingdale's is leaving the Mall of America after 20 years. Saks Fifth Avenue converted its downtown Minneapolis location into a lower priced Off 5th Ave format. Neiman Marcus has also struggled in downtown Minneapolis.
Brennan thinks two factors are in play, both cultural.
1. Twin Cities shoppers are not as fashion forward as their counterparts on the coasts.
Nothing new with this theory. Fashion trends seem to take their time spreading from the coasts to the Midwest though social media seems to have shorten the trip. Take Missoni. Target Corp. introduced Missoni before New York's Fashion Week in September and the collection subsequently sold out the first day it was introduced to the Twin Cities the following week.
2. Twin Cities don't spend as much on expensive items.
A little bit of that Lutheran frugality, eh? Perhaps.
There are some reasonable explanations why Bloomingdale's didn't succeed at the Mall of America. The store was much too big. Even the best retailers would find it challenging to squeeze enough sales out of a three level, 210,000 square foot store.
As for Saks and Neiman Marcus, retailing has always been problematic in downtown Minneapolis.
But Brennan may be onto something. Luxury retailing as whole enjoyed a strong 2011, which makes Bloomingdale's struggles in Minnesota all the more atypical.
The MOA has also been generating record sales and traffic, mostly due to its Nickelodeon theme park and upper income shoppers.
"If [Bloomingdale's] couldn't make it at the Mall of America, I don't think they can make it anywhere in the Twin Cities," Brennan said.
Even Sears, which announced recently it will close over 120 stores because of poor sales, decided to keep its Minnesota stores, including the one at MOA, open. Sears!!!
Struggling women's apparel chain Christopher & Banks is closing 100 stores by the end of the month but only one in Minnesota.
Bon-Ton Stores, another struggling department store chain, is looking to open more Herberger's in the metro area.
Here's another theory. Minnesota fueled the dominance of the discount format with Target. More specifically, the Minneapolis-based retail giant pioneered the concept of "cheap chic," the idea that shoppers can buy trendy, fashion forward merchandise like Missoni at prices considerably lower than a luxury department store.
In fact, "Chez Tarjay" did it so job so well that local shoppers have fully embraced Target's mantra: "Expect More. Pay Less."
Perhaps we should adopt that phrase as our new state motto.
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