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NEW YORK -- The guardians of the palace that is Bergdorf Goodman have become increasingly vigilant.
As the world's only premier luxury department store situated solely in New York, Bergdorf Goodman has felt the impact of 9/11 and the shrinking wealth of the rich perhaps more than any other retailer. On Sept. 18, BG notified vendors it was canceling remaining fall orders, with the exception of special orders, and scaling back on resort and spring. Though stores nationwide canceled goods in the wake of the World Trade Center and Pentagon tragedies, BG's letter came to symbolize an industry in turmoil and one that was desperate to dispose of merchandise.
What has emerged from the calamity is a more cautious and leaner Bergdorf Goodman as it heads into the heart of the fall 2002 selling period. The retailer is determined to find a stronger voice with a younger and hipper crowd without becoming another Barneys New York and at the same time grow its classic businesses to keep its older clientele. It also must reverse revenue declines seen in the last three quarters.
According to BG chairman and chief executive Ron Frasch and president Peter Rizzo, the fall strategy entails increased regular-priced selling off of reduced levels of inventories, intensified marketing of the store's top-50 vendors that it identified last year, and a resumption of renovations.
"We feel we have reorganized how we are buying product," Frasch said, in an exclusive interview Monday. "There is a lot more focus on in-depth buying in key items," such as Brunello Cucinelli chunky sweaters, Dolce & Gabbana short day dresses and Alexander McQueen suede tops with ruffles. "Planning for fall was challenging. Last year can't be utilized very well for planning. You have to go back to the prior fall, and plan out the business week by week."
Frasch explained that BG completed the fall 2002 plan about five or six months ago, when business was better. Nevertheless, "Base inventories are down, but we've got an aggressive receipt flow," he said. "We are much cleaner. Our goal is clearly to grow the topline, but most importantly, we expect healthy growth," meaning meatier margins.
Cutbacks have been made across the board, but mainly centered on merging back office operations into...