In its third annual ranking of U.S. publicly held department stores, Apparel magazine placed Kohl's (NYSE:KSS) in the top slot, very narrowly beating out Dillard's (NYSE:DDS), with Macy's (NYSE:M), Belk and Neiman Marcus rounding out the top five. It's important to note Apparel's ranking criteria, though.
First, it is looking at profit margin, which the publication argues is the best way to assess a retailer's health. That's how Kohl's—with a 5.11 percent profit margin—so narrowly beat Dillard's, with a 5.10 percent margin. Second, it doesn't rely on any particular industry definition of "department store," instead relying strictly on how each chain chooses to characterize itself with the U.S. Securities and Exchange Commission. That's why Walmart and Target—which sell an awful lot of clothes but label themselves with the SEC as variety stores, which essentially means discount chains—are not on the list, nor are Nordstrom, Abercrombie & Fitch and American Eagle Outfitters.
The full Apparel top 10 list are, in order, Kohl's (5.11), Dillard's (5.10), Macy's (4.82), Belk (4.76), Neiman Marcus (3.22), Saks (2.00), Burlington Coat Factory (0.61), Bon-Ton Stores (-0.74), Sears (-2.33) and JCPenney (-7.59). The publication includes Belk and Neiman Marcus on the list despite the fact that they're privately held because both chains release financial data publicly.
The publication said there were chain-specific reasons for the top-margin retailers. With Kohl's, for example, the story cited the chain's decision to relocate customer service, moving it from the back of the store to the front, along with shrinking the footprint of almost all of its new stores down to 64,000 square feet.
At Dillard's, Apparel said, the chain has found success with its restrictions on which clothing is offered. It credited Dillard's "merchandise strategy that is focused on presenting limited distribution, high-profile brands not typically found in department stores, along with well-known, highly regarded national brands—and fashionable, nationally recognized Dillard's exclusive brands, including Antonio Melani, Gianni Bini, Roundree & York and Daniel Cremieux."
- See this Apparel story
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