Von Maur’s Expansion Strategy: Growing Beyond the Midwest

Moving Into New Markets

Von Maur survived the Great Depression with that mentality and now it’s using it to grow during the present Great Recession. Since 1897, Von Maur has made the Midwest its headquarters, with 25 stores throughout Illinois, Iowa, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska and Ohio. Two years ago, the company began venturing into new territory when it opened its 140,000-square-foot location in North Point Mall in Alpharetta, Ga., an affluent suburb north of Atlanta. The Southeast success spurred Von Maur to open a second Georgia location in Atlanta’s Perimeter Mall last year.

“We’ve consistently been in the Midwest for a very long time – more than 140 years,” Westendorf says. “We reached the point where we needed to look at markets outside of the Midwest. The Southeast has some wonderful cities and the success we saw in Alpharetta, Ga., led us to say, ‘We’re on to something here. We have a much broader appeal than just the Midwest; we really have a universal appeal.’”

Von Maur has taken its appeal and recently moved into Hoover, Ala’s., Riverchase Galleria. It also opened a new store in Victor, N.Y. Next year, Von Maur will make its way into Oklahoma City with a new store in Quail Spring Mall.

Renovating Retail

As the company enters new markets, it is piloting a new look, as well. The juniors, contemporary, handbags and lingerie sections in the new stores have been fitted with different flooring, fixtures, wall treatments and fitting rooms to set each one apart from the other. Von Maur is relying on customer feedback to determine what works and what doesn’t. When it finds its design sweet spot, the company will go back and retrofit its older locations.

Von Maur has managed to invest in new stores and new designs not only during the recession, but while on a strict organic diet – no acquisitions or mergers – which according to Westendorf goes against the grain of current department store trends.

“The last several years have seen some pretty big changes in retail,” she says. “The landscape has narrowed. There used to be a lot of different regional stores and those have been swallowed up. Now there are just a few bigger players.”

Going against large national competition has posed some threats – especially in the area of purchasing. Coast-to-coast department stores have leveraged their numbers to put pricing pressure on vendors and give themselves greater buying power with well-known brands. Von Maur offers those popular mainstream brands, too, but it’s found great success in playing to a strength that other retailers don’t have.

“We don’t do any private-label offerings here; it’s only branded goods,” Westendorf says. “But we also go that next step and seek out very unique brands that you can’t find at other department stores. These unique brands help to differentiate our mix of product and it’s definitely something our customers notice.”

In All 50 States

In regards to its e-commerce website, Von Maur is working to get its entire store inventory available online. The retailer launched its e-commerce website in 2006 with 25 items and a completely manual system. It has since made major upgrades. In 2010, Von Maur built a warehouse across the street from its corporate office and installed a KIVA pick-to-light fulfillment system to expedite orders. Currently, 60 to 65 percent of its store inventory is available online, but Von Maur is working to increase that number to 95 percent.

“E-commerce would certainly fall into one of our top stores for volume,” Westendorf explains. “We aren’t a national chain – yet – and because we are not in all 50 states, E-commerce provides us with a national presence so that customers are able to shop with us.

“We do a lot of business beyond the borders of our brick-and-mortar locations, and it’s not just trading off local customers. We’ve been able to gain new customers that we otherwise would not have.”

E-Commerce provides another avenue as Von Maur continues to expand from its Midwest home base. Westendorf says that other than its Oklahoma City location set to open in 2014, along with plans to open in the greater Milwaukee area in 2015, the retailer has no finalized plans for another location but is continuing to seek out new markets.

“We’re open to any market,” Westendorf says. “It’s really about having the right project in the right mall and making sure the timing is right. We’ve been very disciplined in our approach and we’ve never overextended ourselves. Because we’ve built a healthy business, we’ve been able to make these leaps into new states.”