Burdines, Inc.

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Burdines, Inc.

22 East Flagler Street
Miami, Florida 33131
United States
Telephone: (305) 835-5151
Fax: (305) 577-2234
Web site: http://www.burdinesflorida.com

Wholly-Owned Subsidiary of Federated Department Stores Inc.
Incorporated: 1925
Employees: 9,000
Sales: $1.36 billion (2002)
NAIC: 452110 Department Stores

Burdines, Inc., a subsidiary of Federated Department Stores, operates more than 50 upscale department stores, providing designer clothing, shoes, cosmetics, and home accessories to residents and tourists throughout the state of Florida. Known as The Florida Store, Burdines differentiates itself from other department stores by incorporating elements of Florida culture in the design and decor of its stores. The retailer stocks spring and summer clothing during the winter months and emphasizes Florida's sunny, tropical atmosphere by integrating tropical colors and motifs and sculpted palm trees into each store's interior design. With locations in Fort Lauderdale, Tampa, Gainesville, Tallahassee, Daytona Beach, Melbourne, Fort Meyers, and other areas, the retailer is perhaps best known for its flagship Miami Dadeland store, which is considered one the best suburban department stores in the United States. With 640,000 square feet of retail space in two buildings, including the Burdines Home Gallery, the Dadeland Burdines is the largest suburban department store in the country. In 2003, as part of a plan to consolidate its holdings, parent Federated announced plans to begin converting the Burdines name to that of Macy's.

From Frontier Trading Post to Modern Department Store

After a winter freeze destroyed his citrus crop in 1895, retired Confederate Army General William Burdine turned his attention to the dry goods retail business. He opened a small store in central Florida, and in 1898, he and his son moved the operation to Miami, then a small fishing village that had just received its first railroad line and incorporated as a city. When Burdine opened Wm. Burdine & Son in Miami, the town had a population of less than 1,200. Funded with $300 capital and housed in a 1,250 square-foot building at Avenue D and 12th Street (now Miami Avenue and Flagler Street), the dry goods store resembled a frontier trading post. Burdine & Son offered a limited selection of shoes, clothing, fabrics and sewing notions, lace curtains, table linens, and umbrellas. Burdine catered to local construction workers, soldiers, and natives from the Miccosukee and Seminole tribes, who bought foods with money obtained from the sale of alligator and otter skins.

The city of Miami and Burdine & Son matured together during the early 1900s. The store's product offering expanded, and by 1912 the store had evolved into a full-scale department store, with all of the modern merchandise available in large northern cities. During this time Miami had become a luxury resort destination for wealthy northerners escaping the cold winters, and Burdine & Son configured itself to meet the needs of this clientele. Roddey Burdine, who became manager of the store after his father's death in 1911, shaped Burdine & Son into a fashion-savvy store with an identity that reflected its tropical location. He coined the name "Sunshine Fashions" in reference to the clothing styles, colors, and fabrics appropriate to Miami's warm climate and casual atmosphere. Burdine & Son stocked high-quality European clothing in the latest fashions and began to display them in fashion shows in 1914. Excellent customer service became a hallmark of the store as Burdine awarded bonuses to employees at every level. Burdine & Son became the largest volume retailer south of Washington, D.C. and east of New Orleans, earning Roddey Burdine the moniker Merchant Prince of Miami.

Burdine & Son attained a reputation in northern states as a fashionable place to shop and dine. The company advertised the store in national magazines, urging potential customers to travel with empty trunks that could be filled with merchandise found only at Burdine & Son. One advertising slogan referred to Florida as the place "Where Summer Spends the Winter." Because the store offered warm-weather clothing all year long, Burdine & Son proved to be an excellent test market for manufacturers' lines of spring and summer clothing before delivery to department stores in northern states.

The company simplified its name to Burdines, Inc., in conjunction with the first public sale of stock in November 1925. Proceeds from the stock offering were used to fund expansion and as working capital. During the 1920s, Miami experienced an economic boom, and Burdines found it necessary to expand the store, by then a six-story, 138,000 square foot structure. A six-story addition provided another 70,000 square feet of retail space. Burdines opened new stores in West Palm Beach in 1925 and in Miami Beach in 1928.

As a promotional device, Burdines launched a radio show in 1928, hosted by "Enid Bur" (derived from reshaping the letters in the name Burdine). In addition to presenting fashion news and guides to shopping at Burdines, the show provided household hints and played classical music. In promoting Burdines as a prominent Florida store, Roddey Burdine commissioned an exclusive fabric design, called Moon over Miami for the popular song of the same name, available only as clothing sold at the store. In 1936, the year Roddey Burdine died at the age of 49, company sales reached $5.6 million, earning net profit of $500,000.

Mid-20th Century: Success, Failure, and Expansion

Burdines struggled through the Great Depression, but expanded again during the 1940s. The company closed the West Palm Beach store during the 1930s, but opened a store at another location in that city in 1941. Burdines also opened its fourth store in the growing city of Fort Lauderdale. Capitalizing on the patronage of wealthy Latin American tourists, the company launched a mail-order catalog to serve customers in Latin American countries. Customers included American military personnel stationed in Cuba, who sent a supply ship to Miami every six months to place and fill orders at Burdines. The company developed a Teen Board to consult on clothing selection, insuring that store merchandise appealed to a new generation of shoppers. In 1950 sales reached $27.8 million, garnering net profit of $1.1 million.

During the early 1950s Burdines experienced financial difficulties which constricted cash flow and would lead to its sale to Federated Department Stores. By November of each year, the company's credit line was exhausted, forcing buyers to hold orders until after the Christmas shopping season. In summer 1954 Burdines refinanced debt with a 20-year, $5.5 million loan and arranged for a sale and leaseback of a new store in West Palm Beach. The situation worsened, however, as competition from a new Jordan Marsh store diminished Burdines' prevailing market share. Jordan Marsh offered shoppers an elegant new shopping environment, while the buying power of the parent company, Allied, allowed the store to stock a wider selection of merchandise. After several years of resisting Federated's offers to acquire Burdines, in 1956 the company accepted. A stock swap valued at $18.5 million completed a merger in May.

The second-largest department store group after Allied, Federated provided capital investment which significantly improved the merchandise mix at Burdines and enabled Burdines to expand with new stores. Operating in one the fastest-growing areas in the nation during the 1960s, Federated located new Burdines department stores with demographic growth projections in mind. For instance, the company opened two stores in Hialeah, a sparsely populated area northwest of Miami. Burdines acquired 100- to 200-acre parcels of land and sold the land surrounding the stores to mall developers. Thus the two stores in Hialeah eventually became part of shopping centers, specifically Dadeland Mall and Westland Mall, and residential development followed commercial development. In 1971 the Dadeland Mall store became the largest volume suburban department store south of New York City.

Burdines expanded throughout the state of Florida, initially in the greater Miami area. During the late 1970s the company expanded outside of southeast Florida for the first time. New stores opened in Orlando and the Tampa Bay area, the latter including Sarasota, St. Petersburg, and Clearwater, and Tampa. New stores opened during the early 1980s included locations in Daytona Beach and Gainesville. Burdines opened stores in Ft. Meyers, in southwest Florida, and Melbourne, along the central Atlantic coast. Locations in near Miami in southeast Florida included Boca Raton, Hollywood, and Cutter Ridge. In 1984 Burdines opened a specialty store at the fashionable Mayfair Shops in Miami's Coconut Grove neighborhood, selling men and women's fashions and accessories, cosmetics, and consumer electronics. Between 1977 and 1985, Burdines expanded its chain from 14 stores to 29 stores, ranging in size from 50,000 square feet to more than 200,000 square feet. In 1985 sales reached $757.5 million.

Burdines refined its image as it grew during the 1970s and 1980s. As population growth in Florida attracted other department store chains to the state, Burdines developed "the Florida Strategy" to differentiate the company from the competition. Identified as "The Florida Store," Burdines highlighted the unique product offerings attributable to its experience and knowledge of Florida's tropical climate. When competing department stores from northern states offered dark colors and winter clothing, Burdines stocked merchandise suitable to Florida weather. Winter merchandise included shorts, bathing suits, cotton sweaters, and linen clothing, but few winter coats.

Company Perspectives:

Through and through, Burdines is "The Florida Store." We're palm trees, tropical colors, dolphins and sunshine—the imagery and the mindset that makes Florida a place like no other. Our customers are Floridians of multiple dimensions—full-time residents employed in the state's fast-growing economy … young families who want the excitement and unique lifestyle of seaside communities … snowbirds seeking sun and warmth when it's cold up north … new immigrants from across Latin America and around the world … tourists thirsty for entertainment experiences … retirees relocated to enjoy the slower pace of life near the beach. Because Burdines operates in Florida—and only in Florida—we uniquely mold and reflect the state's unique sense of style and fashion.

Burdines' attention to demographics also extended to the needs of individual stores. Buyers selected merchandise in styles appropriate to the Palm Beach socialite or the Midwesterner living on the Golf Coast, depending on the location of the store. Burdines provided an extended line of junior clothing for college students in the Gainesville area and petite-sized clothing for the Hispanic customers and Latin American tourists at the Dadeland store. As hip-hop style clothing became popular in the 1990s, the North Miami store served the African-American community with designer clothing from Karl Kani.

Burdines designed store interiors to fit the tropical atmosphere of Florida as well as the location of the store. Designer Kenneth Walker applied tropical hues, such as coral, turquoise, and white, as well as beachside motifs, such as the ocean, dolphins, and palm trees. In Gainesville, home of the University of Florida, columns around the escalators resembled the school's alligator mascot. The Mayfair store in upscale Coconut Grove exuded elegance, with mirrored ceilings, marble flooring, and columns in lacquered pastel colors. The stores featured atriums and skylights or ceilings painted sky blue with clouds. Plaster palm trees became an informal trademark of the company's identity as The Florida Store. Officials at Burdines considered expanding to nearby states or Puerto Rico during this time, but ultimately decided to limit expansion to Florida, so as not to dilute the Burdine's brand identity.

Change in Ownership in the 1990s

While new store expansion continued in the mid-1980s, growth came to halt in 1988 when Campeau Corporation acquired Federated through a leveraged buyout. The high level of debt forced Federated and Allied, acquired by Campeau in 1986, into Chapter 11 bankruptcy in 1990. In the course of bankruptcy proceedings Federated and Allied merged. Federated closed four stores and sold 17 stores, mostly Jordan Marsh and Maas Brother stores previously owned by Allied.

This eliminated stores with low profits as well as direct competition, as most stores were sold to mid-range department store chains such as Mervyn's, Montgomery Ward, and J.C. Penney. Another 17 Jordan Marsh and Maas Brothers stores were merged with Burdines. When Federated emerged from bankruptcy, Burdines thrived as a streamlined company of 44 stores with profit margins at 12 percent, compared to 8 percent in 1986. Sales had declined under Campeau's ownership, attributed to lower quality, lower-priced merchandise meant to stimulate cash flow through high sales turnover. Burdines revamped its product offerings and sales surpassed $1 billion in 1992. The Dadeland store alone garnered $30 million in profits.

Burdines' attention returned to growth and expansion during the early 1990s. A new department store opened in Pembroke Pines in 1992, and the company launched a new store concept, Burdines Home Gallery. These stores offered furniture, home accessories, fine china, silverware, glassware, housewares, electronics, gifts, and floor coverings. In addition to small home stores, in November 1993 Burdines opened a 215,000 square-foot home furnishings store in the building once occupied by Jordan Marsh at Dadeland Mall. Home merchandise was relocated from the Burdines department store at Dadeland to the Home Gallery, allowing the department store to double its clothing line; Burdines then added significantly to the home furnishings line to fill the large new store.

The Burdines Home Gallery offered an extensive line of high-quality home merchandise on three floors. The glassware selection featured crystal designed by Gianni Versace and Paloma Picasso, and the store dedicated an entire room to Waterford crystal. Electronics included the Oster line of 1950s retro style kitchen appliances. Burdines promoted the Home Gallery through 60 full-page advertisements on television, billboards, and in certain regional editions of The Miami Herald. Direct mail advertising to Burdines charge card customers involved a 44-page catalog. The store's bridal registry alone required a staff of 15.

In 1994 Federated purchased Macy's Department Stores, raising questions about the possibility of changing Burdines to the Macy's brand. In May 1996 Federated issued catalogs that were essentially the same; since both chains offered much of the same merchandise, Federated saved the expense of advertising by offering the same catalog with the different brand names on the cover. Burdines became Federated's most profitable division during the 1990s, even more profitable than Macy's and Bloomingdales. Questions about a possible name change faded for the time being as Burdines continued to expand as The Florida Store.

Key Dates:

1898:: William Burdine opens Wm. Burdine & Son with $300 in start-up capital.
1911:: After his father's death, Roddey Burdine takes over management of store.
1925:: Company reincorporates as Burdines, Inc. and goes public.
1956:: Federated Department Stores acquires Burdines, providing capital for expansion and improvements.
1971:: Burdines at Dadeland Mall becomes the largest volume suburban department store south of New York City.
1988:: Campeau Corporation acquires Federated Department Stores.
1992:: Bankruptcy-based merger between Federated and Allied expands Burdines to 44 stores; Burdines' sales exceed $1 billion for the first time.
1998:: Burdines celebrates 100th anniversary.
2003:: Federated announces plans to reformat Burdines to Burdines-Macy's, and eventually to Macy's.

2000 and Beyond

During the late 1990s Burdines introduced several new stores, including those at Florida Mall in Orlando, Citrus Mall in Tampa (replacing a store closed nearby), and the upscale Oviedo Marketplace northeast of Orlando. In July 1999 Burdines celebrated the grand opening of a department store at Aventura Mall, considered one of the company's flagship stores with 226,000 square-feet of retail space. Burdines promoted the store with an elaborate bus advertising campaign; the fully-painted exterior of 33 public buses which stopped at Aventura mall featured cooperative product advertising with Liz Claiborne, Ralph Lauren, and other designer brands. In 2001 Burdines opened a new store at The Mall at Wellington Green.

With the opening of its eighth furniture gallery, in Clearwater, in 2001, Burdines applied unusual merchandising techniques, as the store featured more home accents to create drama and glamour. For instance, a wall of Natuzzi chairs highlighted leather covers in bright colors. The floor plan combined with merchandise display to lead customers to various sections of the store where they encountered different styles and moods. The company applied these techniques at existing stores as well as at Burdines Fort Lauderdale Furniture Gallery, which opened in July 2002.

In 2001 Burdines' initiated store renovations which launched a sophisticated, contemporary look to reflect the international, refined taste of the company's customer base, while maintaining the store's Florida identity. Burdines began with the store at Aventura Mall. The company's identifying palm trees were recomposed in cast resin for a more elegant look. Tile flooring was custom-designed with embedded seashells and sparkling flecks of mica. New lighting and sculptured palm trees on either side of the main entrance enhanced the store's exterior. Burdines remodeled stores in Hialeah, Miami, and Orlando in 2002, and the company authorized a $50 million renovation of the Dadeland store as well, to occur in phases over three years. Improvements at Dadeland included the addition of a parking garage at the front of the store, wider aisles for ease of movement while shopping, a babysitting area, and a day spa.

As the national economy slowed, Burdines experienced a decline in sales, prompting the company to initiate several programs to attract customers. Burdines sought to attract young women by stocking hip styles in junior clothing and remodeling fitting rooms for comfort, with more space and the addition of lounge chairs. As discount mass merchandisers, such as Wal-Mart and Target, began to sell clothing in fashion-forward styles, parent Federated suggested several strategies to compete with the discount chains. At two test stores Burdines provided shopping carts and price-check scanners and moved cash registers from each department to a central check-out area near the store exits.

Customers at test stores did not like the new system, however, complaining that it was more difficult to find a sales clerk to assist them in store departments; Burdines halted the test program after five months. Burdines sought new ways to improve on service, for instance, by testing the use of palm-pilots in the shoe department. A sales clerk could check stock and request an item to be brought to the customer by a stock clerk without the sales clerk having to leave the customer.

In May 2003 Federated announced plans to convert Burdines to the Macy's nameplate. Beginning in February 2004, Burdines' 56 stores would operate under the name Burdines-Macy's. Seven Macy's stores in Florida operated under the dual name as well. At a later date the stores would be switched to the Macy's name. Since Macy's and Burdines maintained several stores at the same malls, industry specialists speculated that Federated would close some stores or convert them to home furnishing stores.