QUOTE AND NEWS
Motley Fool  Jun 9  Comment 
A rough first-quarter report spooked investors last month.
Benzinga  May 13  Comment 
Dillard's, Inc. (NYSE: DDS) shares reached a new 52-week low of $55.49 as the company reported downbeat results for the first quarter. Nordstrom, Inc. (NYSE: JWN) shares fell 15.81 percent to touch a new 52-week low of $38.08 as the company...
Forbes  May 11  Comment 
Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in National Beverage Corp. (NASD: FIZZ), where a total of 696 contracts have traded so far, representing approximately 69,600 underlying...
Motley Fool  May 11  Comment 
Following fears in the retail sector last month, Dillard's shares tumbled. Here's what you need to know:
Motley Fool  May 2  Comment 
The company has been working on its physical stores and department-store relationships. But is it neglecting e-commerce?
Forbes  Apr 11  Comment 
Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative...
TechCrunch  Apr 10  Comment 
 My team, the Defense Digital Service (DDS) exists to bring in the best processes, talent, and technology from the private sector into the DoD. An offshoot from the United States Digital Service (USDS) at the White House, we’re tasked with...
Forbes  Feb 23  Comment 
In trading on Tuesday, department stores shares were relative leaders, up on the day by about 1%. Leading the group were shares of Dillards (DDS), up about 8.9% and shares of Macy's (M) up about 5.9% on the day.
Automotive World  Dec 15  Comment 
2016 Q50 adds trio of new powerful and efficient turbocharged engines, including a 400-horsepower 3.0-litre twin-turbo V6 Next-generation Direct Adaptive Steering™ (DAS) leads technology enhancements New Dynamic Digital Suspension (DDS) offers...
Market Intelligence Center  Nov 25  Comment 
The patented algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center found a trading opportunity with Dillard's Inc. (DDS) that should provide a 2.74% return in just 51 days. Sell one Jan. '16 call at the $75.00 level...




 

DDS most likely refers to Dillard's. For other possible associations, see DDS (disambiguation).

Dillard’s (NYSE:DDS) operates a chain of department stores across the U.S.Dillard's targets middle- and upper-class consumers with premium-priced branded and private label clothing, cosmetics, accessories and home goods.

Dillard's offers its own exclusive and private label brands alongside merchandise from branded manufacturers, which represents approximately a quarter of total sales. These brands can drive higher profit margins, so Dillard's is introducing new lines to grow the penetration of these private label products. Growing these brands is key to Dillard's competitiveness with its larger competitors, such as Macy's Inc. (M) and J.C. Penney (JCP). However, Dillard's lags behind larger and smaller competitors by the fact that all of the company's stores are located in malls whereas those of its competitors have several off-mall locations -- Dillard's risks losing market share as more consumers shift to shopping at off-mall locations.

Company Overview

Dillard’s operates mall-based department stores and an e-commerce site in the United States that sell high-priced branded and private label merchandise.

Dillard's stores and e-commerce site carry a variety of clothing, accessories and home goods. The company's merchandise offerings include products from premium branded manufacturers, such as Guess? (GES) and Polo Ralph Lauren (RL), in addition to exclusive and private label brands that Dillard's wholly owns or co-owns with outside partners, such as the Roundtree & Yorke and Antonio Melani brands. Dillard's primary customers are women, typically in the middle- and upper-class.

Business Segments

Dillard's operates under six different business segments:

  • Cosmetics (15% of net sales)
  • Ladies’ apparel and accessories (36% of net sales)
  • Juniors’ and children’s apparel (8% of net sales)
  • Men’s apparel and accessories (17% of net sales)
  • Shoes (14% of net sales)
  • Home and furniture (7% of net sales)

The company also has a small construction segment which accounts for 3% of net sales.

Business Growth

FY2010 (ended January 30, 2011)[1]

  • Net sales increased by less than 1% to $6.1 billion.
  • Net income increased by 162% to $179 million.

Trends and Forces

Growing Dillard's Exclusive and Private Brands

Department stores are increasingly seeking to distinguish themselves and earn higher profit margins by offering exclusive brands and private label brands. Exclusive brands are brands marketed under the wholesaler's name that are sold only in a particular chain; one exclusive brand at Dillard's is the Antonio Melani line that can only be purchased online or at Dillard's stores. Private label brands are produced by wholesalers, but sold under the brand name of the retailer. Exclusive brands such as Gianni Bini and Roundtree & Yourke, can help draw customers into Dillard's stores, as the products can only be found at Dillard's. Dillard's own private label products are typically priced lower than branded merchandise, but have a higher profit margin for Dillard's as the retailer is able to receive the good at a lower cost by avoiding branded manufacturers.

Department Store Migration to Off-Mall Locations

As Dillard's is far behind its competitors with regards to this trend, it is positioned to lose market share from its competitors as consumers continue to shop more often in off-mall locations, refraining from frequenting malls and subsequently avoiding Dillard's stores.

Since the 2000's began, consumers have shifted their shopping habits to strip-malls and shopping centers rather than traditional malls. Department stores are traditionally attached to malls, but have begun moving out into shopping centers and other "off-mall" locations to follow the changing customer's shopping patterns. Off-mall stores are cheaper to operate than traditional mall-based department stores, due to smaller real estate costs and less in-store employees, and offer consumers convenience by serving as a one stop shop. Dillard's is positioned to lose from this trend as none of their stores are in off-mall locations.

Competition

Dillard's is one of the smallest national department store retailers. It competes primarily against other department stores, but also is facing increasing competition from discounters and mass merchandisers like Target (TGT) and Wal-Mart (WMT) as these companies grow their clothing and home goods categories.

Dillard's primary competitors are moderate- and higher-priced department stores, J.C. Penney (JCP), Macy's Inc. (M) and Sears Holdings (SHLD).

References

  1. DDS 2010 10-K "Selected Financial Data" pg. 13
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