Von Maur's March

Von Maur got its start like many of its department store peers: An immigrant with an American dream opened a downtown store, customers came, they shopped, the brand took hold and took off.

In the case of the midwestern upscale department store banner Von Maur, the dreamer was German immigrant J.H.C. Petersen, who opened a downtown storefront in Davenport, Iowa, in 1872. He and his sons grew the business and sold it nearly a half-century later to a partnership that included two Austrian brothers -- C.J. and Cable von Maur, whose family gained full ownership by 1937.

The concept operated under various names until 1989, when it became simply Von Maur, but was contained in Iowa and Illinois until the mid-1990s, when it expanded its geographic reach into Indiana, Kansas, Kentucky, Minnesota and Nebraska, then into Michigan and Ohio a decade later.

Today, under the leadership of the von Maur family -- co-chairmen Charles and Richard, and president Jim -- the privately held company is continuing to grow. The first Von Maur store in metro Atlanta opened in November 2011 at North Point Mall, joined by a second -- at Perimeter Mall -- a year later. Supplementing the 27 open-and-operating stores are full-line department stores in the works for The Corners in Brookfield, Wis.; Eastview Mall in Rochester, N.Y.; Quail Springs Mall in Oklahoma City; and Riverchase Galleria in Hoover, Ala.

Slow and steady has been the chain's mantra. It continues to open two to three Von Maur stores each year, and is growing its women's apparel specialty concept Dry Goods at about the same pace. The 4,000-sq.-ft. mall banner is at eight stores and counting.

Von Maur has plenty of hallmarks. It offers interest-free credit cards. It provides free gift wrap. Live pianists perform daily in the sweeping atriums. The shoe department is unmatched. In fact, fashion is what drives the company; that's what president Jim von Maur told me during our lengthy interview that served as the basis for this real estate cover story and for the Profiles of Leadership on page 16. For this particular feature, we talked about its real estate beginnings and what lies ahead in terms of expansion.

What was the main impetus behind leaving downtown for the suburbs?

When downtowns were no longer the centers of commerce, we knew that we couldn't remain a downtown store; we had to thrive to survive, so to speak. That was difficult, particularly in our hometown of Davenport, Iowa, because the city fathers were not happy when we decided that we needed to abandon downtown in favor of suburban mall locations.

The move to surburbia wasn't without challenges, however. In West Des Moines, Iowa, we put a store in what was the middle of a cornfield. Sales were dismal for the first several years; in fact, the company almost went bankrupt. But an unfortunate event secured our future ? a Younkers department store in the competing mall caught fire, and people started coming to our shopping center. Sales picked up, and they stayed that way. In fact, that store today is still one of our strongest in the system.

What is the typical footprint for Von Maur?

140,000 sq. ft. is standard. In Atlanta, we operate a 222,000-sq.-ft. store, and we'll re-open in Coralville, Iowa, in July with an 80,000-sq.-ft. store. We have the ability to be quite flexible, which has enabled us to leverage great locations as well as be what the customer needs us to be. In fact, we are finding that the customer prefers stores that aren't too big or overwhelming, and are more shoppable. It's easier to provide better service when a store is more compact. But in markets as large as Atlanta, you want a bigger store for more selection. It's all about finding the right balance.

What are your site-selection criteria for Von Maur? Will you ever return downtown?

It's not so much about being or not being downtown, but about being where people are living. For instance, Chicago has a large urban residential population so we wouldn't be deterred from opening downtown. But in downtown Davenport or downtown Indianapolis, there isn't that weekend activity; the nights are quiet, so downtown wouldn't be an option. We would want around-the-clock activity.

What about Dry Goods? Is its growth and expansion still a focus for the company?

Yes. We have opened eight stores over a three-year period. We hope to open two this year, but the plan is to open two to four a year. We are having a tough time finding desirable locations. We are being very choosy, but sales are trending upward and the concept is strong. We are offering that extra service level that you might not find in another mall store.

What's the typical square footage, and where are you headed with Dry Goods?

The typical footprint is 3,500 sq. ft. to 4,200 sq. ft., and if we find a vibrant area that hasn't been introduced to Dry Goods yet, there's a good chance we'll open there.

What about your short-term and long-term expansion plans for Von Maur? What types of markets are you looking for?

We want to continue at a steady growth rate of one to two a year. We also have the e-commerce side of our business that is growing extremely fast, and we are putting a lot of energy and focus into that. Dry Goods is our third growth engine, and we'll continue to grow via those three vehicles. We have Von Maur stores on the drawing boards in Oklahoma City and Milwaukee, and we would very much like to continue to grow down South. We'd love to be in Tennessee, in the Nashville area in particular, but we haven't yet found a viable location. Really, from Denver over to Pennsylvania is the area of the country that we aim to settle.