Department Stores, large retail stores selling many different kinds of merchandise arranged in separate departments. Such stores are found in nearly every important city in the world, and the large department stores often contain more than 100 separate departments. The two major categories of merchandise sold in department stores generally are apparel and home furnishings. Besides making many diverse items available for purchase in one place, department stores offer numerous services, including delivery and mailing of purchases; credit service, usually in the form of charge accounts; and fashion shows.

The organization of a modern department store is often complex because of the large number of goods and services provided. Typically, the operation of a store is conducted through five principal divisions: the merchandising division, responsible for the buying and pricing of merchandise; the sales promotion division, in control of advertising, display, public relations, and other related matters; the personnel division, which supervises employment and the training and welfare of employees; the operations division, responsible for customer and selling services, for deliveries, and for the receiving, marking, and maintenance of merchandise; and the finance and control division, which deals with accounting, customer credit, expense control, and other financial and budgetary matters. Within these five divisions are many subdivisions. The heads, or managers, of the five principal divisions are responsible to the general manager.

Some stores find it practicable to lease certain areas within the premises to outside concerns, which then run their own departments under the name of the department store. This arrangement is most frequently used for such specialized goods or services as millinery, photographic supplies, shoe repair, and beauty salons.

Although some department stores were outgrowths of general stores, most originated as dry-goods stores. The first dry-goods store to become a department store was the Bon Marché, established in Paris in 1838. By the 1860s it resembled the modern department store in size, organization, and administration. Printemps, established in 1885, also in Paris, was probably the first store to be opened as a department store. In the U.S. the trend toward the transformation of dry-goods stores into department stores began in the 1860s and '70s. R. H. Macy & Company, Inc., in New York City, John Wanamaker in Philadelphia, Marshall Field in Chicago, and Jordan Marsh Company in Boston were among the first to be reorganized as department stores during this period.

Among the innovations that characterized the operations of the early department stores were the clearly marked prices on merchandise; the system of reimbursement for or exchange of returned goods; and the sale of ready-made apparel for men. These innovations, successful from the first in attracting customers, were continued and improved on not only by department stores but by most specialty stores as well.

During the last decades the changing character of competition in retailing has challenged traditional department stores. Supermarkets added non-grocery items; variety stores expanded their merchandise offerings tremendously; and many discount houses increased the scope of their merchandise offerings and became self-service.

SUBURBAN BRANCHES

The growth of suburbs around large cities has been responsible for an important department store development, the opening of suburban branches.Suburban branches often are grouped together in a shopping center, an aggregation of retail outlets coordinated for the convenience of customers and the mutual advantage of the stores. The suburban branch is not operated as an exact counterpart of the parent store. The merchandise, for example, is selected to meet the needs, tastes, and desired price ranges of customers located within a particular trading area.

LIMITED SERVICE POLICY

More recent methods adopted in many department stores include the self-selection of merchandise by customers and a cash-and-carry policy. Both methods are designed to reduce operating expenses. In some stores that have adopted the cash-and-carry policy, delivery services have been eliminated altogether. In many stores an extra fee is charged for delivery service.