Von Maur department store chain to enter Atlanta market

Von Maur would use the Alpharetta location as a flagship store in the South; von Maur said he envisions three stores in the Atlanta market.  The closest store is seven hours away in Louisville, Ky.; the company is looking to expand into Alabama, Tennessee and the Carolinas in the coming years.

"We've seen exciting growth in the South. We want to be part of that," von Maur said. "Never in our wildest dreams did we think we would open a store in Atlanta, Ga. It's a dream come true."

Von Maur, based in Davenport, Iowa, has been compared with mid- to high-end retailer Nordstrom. Renderings and photos of the latest opening, in St. Louis in September, show a piano, lounge areas and pictures on the wall. The store is designed to look like a nice house, von Maur said.

Customers rave about Von Maur's service, said America's Research Group Chairman Britt Beemer. He said metro Atlanta is a good test market for the company as it explores entering the South.

Beemer said department store expansion is "almost an extinct possibility anymore" as the number of large stores shrinks. In the past 30 years, Macy's acquired 82 department store chains, including Rich's in Atlanta, Stifel Nicolaus retail analyst Richard Jaffe said.

While Atlanta is not lacking in retail choices, Jaffe said, the location was likely the result of careful thought and research.

"Atlanta's a pretty juicy market now," he said. "It's a big deal, what they're doing. I'm sure it was not undertaken frivolously."

The expansion has been in the works for two or three years, von Maur said. As competitors have closed stores in the recession, he said, Von Maur has seen opportunities to expand. The chain, which was founded by von Maur's great-grandfather in 1872, had one store until the 1960s.

The company is planning to gut the two-story former Belk and expand it to 140,000 square feet from 115,000 square feet. The design includes reddish brick, a cupola and columns to echo Georgia and the South, von Maur said. He estimated it would cost between $15 million and $18 million.

"We wanted to project an elegant department store and we wanted that experience to start right away," he said.

Because of the extensive work that must be done on the space, the opening likely would be pushed back to the fall of 2012 or a new location would be sought if the North Point design is not approved, he said. No contract has been signed yet.

The anchor space at North Point Mall has been vacant since Belk left in August 2009, said Nick Nicolosi, general manager of the mall. He said having Von Maur would be a point of differentiation for North Point and that the store would fill a niche for shoppers. The mall's other anchors are Macy's, Dillard's, Sears and JCPenney.

"It will give us an upper echelon appeal," Nicolosi said. "I can't wait to have them here."

Having Von Maur also would help North Point lease to different tenants, he said, and would make it easier to fill some spaces that are currently dark. Nicolosi said he couldn't remember the last time a local mall brought a new store to the market.

Von Maur has been well received in the other markets it has entered, von Maur said, and has revitalized shopping centers where sales were slow. He also said the company offers an above-average market wage to its employees and is closed on holidays like Labor Day and the Fourth of July.

Atlantans likely will take to the store, said Retail Management Consultants President George Whalin. Von Maur offers year-round gift wrapping and free shipping.

"It's a big, sophisticated city," Whalin said. "That's the advantage. It's a city where people dress well."

The competition will be good for consumers, said Daniel Butler, National Retail Federation vice president for retail operations. He said the company wouldn't come to Atlanta if it didn't think it could succeed.

But Jaffe of Stifel Nicolaus said while the city is a good market, other retailers are going to stay competitive.

"For one to succeed, another has to cede market share," Jaffe said. "Nobody is willingly going to give up market share to Von Maur. Let the games begin."