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Unlike Tyson and Hunt, Dillard has no plans to retire.

In Retail's 'Shakeout Period,' Dillard's Positioned to Survive

William B. Dillard Sr. has seen two of his entrepreneurial friends recently retire and turn their companies' leadership over to others.

But Dillard, chairman and chief executive officer of Littel Rock-based Dillard Department Stores Inc., has no plans to follow in the footsteps of Don Tyson or J.B. Hunt.

"Well, obviously at my age, you think about it," the 80-year-old Dillard said at the company's annual meeting May 20. "But I don't have any plans to retire. As long as I feel good and as long as I can keep coming to work, I'll be there."

Dillard has been coming to work in the same job since he founded the company in 1938. He guided the upscale department store to more than $5.5 billion in sales at its 229 stores in 1994. That was an 8 percent increase over '93 sales.

He says the retail industry has become extremely competitive in recent years.

"It's no secret there are more stores than there are customers," Dillard says. "This is going to be a shakeout period,and some of the existing [companies] won't make it. I believe Dillard's is positioned where we will be one of the survivors."

The company experienced a flat first quarter with net income almost identical to the first quarter of '94. Dillard conceded at the annual meeting the industry as a whole is stagnant. As weak as Dillard's first quarter was, only one competitor, May Co., had a better quarter - its earnings per share were up just 1 cent.

Women's ready-to-wear apparel and men's tailored wear have been in a decline for more than a year.

"Even IBM doesn't make its employees wear suits one day a week," Dillard says.

Dillard's has used the slow period to improve its balance sheet. Since 1992, Dillard's long-term debt has decreased and is now less than $1.2 billion.

The firm has concentrated on buying more of its stores rather than leasing space. It owns "far and away" more of its stores than Dillard's competitors, says William Dillard II, president and chief operating officer.

"What's happened in our industry is that we've gone through a period of just no shopping center construction," William Dillard II says. "That impacted our ability to generate space in new centers, so a substantial portion of our new square footage has come as additions in existing centers."

Advised Simon on Land

Simon Property Group Inc. of Indianapolis recently paid $6.3 million for 95 acres in west Little Rock near Shackle ford Road and Interstate 430. Dillard Sr. emphasized that if Simon builds a mall there, Dillard's would be an anchor store. Dillard's Park Plaza stores would remain open.

But Dillard Sr. says he's unsure if that's the best location in west Little Rock for a new mall, although he says he has no other spot in mind.

He says Dillard's did advise Simon on the land purchase - the price was too good for Simon to pass up. And if a mall isn't built there, he says, the property has other good uses.

He says every store in Arkansas improved sales in 1994. The Fayetteville store showed "a big improvement." Last week, the Northwest Arkansas Mall announced a major expansion, which includes the addition of a second 100,000-SF Dillard's store.

The Park Plaza stores continue to be the company's leader in revenues.

Dillard's has stores in every Southern state except Georgia. The company will begin construction on its first Georgia store next month in a suburb north of Atlanta.

"We're working on other locations in the [Atlanta] market," Dillard Sr. says. "We don't intend to have just one store [there]."

Dillard's still has no stores in California, although stores are in Nevada and Arizona. Dillard Sr. says he doesn't expect to open a California store in the near future.

Less than 40 people attended Dillard's annual meeting, held on a Saturday morning in the board room of the First Commercial Bank Building. Probably only 10-15 weren't members of Dillard's board of directors or management.

One couple traveled from California to attend their first Dillard's meeting, which was adjourned in about 20 minutes.
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Title Annotation:Dillard Department Stores Chmn./CEO William Dillard Sr.; Don Tyson; J.B. Hunt
Author:Smith, David
Publication:Arkansas Business
Date:May 29, 1995
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