apparel: January 2009 Archives

The economic downturn is hitting local stores especially hard. Saddest among those affected are the decades-old establishments, many involved in housing and home goods, suddenly facing bankruptcy or liquidation.

Some recent changes of note:

• In central Pennsylvania, Good's Furniture and Flooring is closing all its furniture stores, with liquidation sales just underway. Good's dates to 1959 and is under second-generation management.
  
• Olender Mattress in Schenectady, N.Y., which traces its history to 1902, has to close one of its three locations. "This is nothing new for us," says the store's owner, noting the chainlet survived the Great Depression and other economic crises.
• Eighty-year-old Peerless Furniture in Michigan is closing its two stores. Peerless, which began as a mattress manufacturer in 1924, calls its decision "responsible."
• In Massachusetts, Lebow Men's and Boy's Clothing is closing after 81 years. The store, which prided itself on its personalized service, has been unprofitable for some time.
  

In its quarterly earnings announcement, women's retailer Chico's noted it may close up to 25 stores as part of a financial retrenchment. No details were revealed, however, and specifics of the store closings were not disclosed.

Hip infant retailer Babystyle very quietly closed its business last week. Parent company Right Start seems to have laid off its employees, and local stores had unexplained going-out-of-business sales, but never made an announcement. It took tips and inquisitive bloggers to break the news.

Babystyle, which sold maternity, baby and kids' merchandise, has a simple message on its website that says operations have been "suspended." Tiny Ride, another Right Start brand, is reportedly affected as well. No official word is yet available as to whether Right Start is itself going out of business, although some rumors suggest an acquisition or bankruptcy is possible. Right Start bought Babystyle and Tiny Ride in 2008.

A pair of major American brands announced store closings last week that were hidden within press releases about layoffs:

• Phillips-Van Heusen is closing 175 stores over the next two to three years in a restructuring move. The company, whose brands include Calvin Klein and Bass, did not specify which stores or lines would be affected.
• Cardmaker American Greetings is closing 60 stores out of 415 nationwide. These are happening quickly; some are slated to close by the end of February. Financially, the company's credit rating just reached junk level, which is a bad sign for the long-term health of the chain overall.

Hartmarx, the maker of clothing brand Hart Schaffner Marx, filed for Chapter 11 bankruptcy due to the increasingly common refrain of reduced demand and poor credit availability. The company noted sharp dropoffs at luxury price points. Hartmarx, which possesses licenses for brands such as Pierre Cardin, hopes to continue operations during bankruptcy proceedings.

Multi-chain retailer Brown Shoe announced plans to close as many as 35 Famous Footwear stores and reduce factory activity. The company, which manufactures Dr. Scholl's and other products, has experienced lower store traffic as well as reduced orders from resellers.

Discount retailer Filene's Basement is blaming non-negotiable rents as a main driver behind 11 store closings. The number of closings is unusually high; Filene's Basement has 36 stores, and the closings are nearly one-third its total.

Filene's Basement has had an up-and-down history prior to this announcement. It has had as many as 56 and as few as 14 stores over the past 15 years, and dealt with a bankruptcy filing in 2000.

Women's apparel manufacturer and retailer Searle Blatt filed for bankruptcy protection last week, alongside an affiliate company called Tom Jones Inc. The company, which has been open since the 1960s, operates seven well-known stores in New York, Tom Jones Inc. Searle Blatt cited the economy's impact on debt as the reason for the filing. Searle has not yet determined whether store closings will be an outcome of the filing.

The occasional store closing by a large chain retailer is part of the normal course of business. Three big names announcing double-digit closings is not:

• Macy's is closing 11 stores in assorted locations around the country. The retailer calls this a normal adjustment but the move is getting significant press.
• Women's apparel chain New York & Co. is closing up to 50 locations over the next five years beginning in 2009.
• Grocery store Supervalu is closing 50 stores in 2009 alone. A brand of Albertson's, the chain closed 25 stores (which they consider normal) in 2008, so the '09 plans represent a doubling of the closures.

French intimates producer and fashion distributor SIL Group is liquidating all its assets in obeyance of a court order. The company, which is owned by Eminence, another French firm, distributed brands such as Sonia Rykiel, Christian Lacroix, Cacharel, John Galliano and Kenzo. TD is still investigating the impact this will have on these brands' manufacturing and distribution.

Update: the full WWD report (linked above) notes that the brands mentioned above are all scrambling to find solutions for spring distribution, and are considering everything from new licensing deals to producing their own items. None of the brands are conceding spring sales at this point.

The unfortunately named men's retailer Against All Odds filed for bankruptcy protection "in the best interests" of all parties yesterday. The 14-year-old company has 70 stores across the country.

Contrary to earlier reports, Goody's Family Clothing is liquidating assets next week, just months after reorganizing. The company, which was in Chapter 11 from June to October, was unable to quell its lenders and continue operations.

Goody's is owned by the same holding company as KB Toys and Whitehall Jewelers, all of whom have ceased operating in the past five months.

Kira Plastinina, a teen fashion label launched with much fanfare in 2008, lasted only seven months before filing for Chapter 7 bankruptcy last week. Plastinina, a 16-year-old designer, was financially backed by father. He reportedly suffered significant losses in the credit crisis and dropped his backing for the brand's United States stores.

KP Fashion rapidly opened 12 stores and had a high-profile debut, with celebrities garnering interest in the label. In line with the bankruptcy filing most of the outlets have already closed.

Fashion house Bill Blass shut down and is liquidating alongside a Chapter 7 bankruptcy filing. The company ceased operating last week and laid off all employees. Parent company NexCen recently closed a $10 million licensing deal for the Bill Blass name, so the brand will likely continue to exist, despite the closure of the legendary couture company.