apparel: March 2009 Archives

The economic downturn is hitting local stores especially hard. Saddest among those affected are the decades-old establishments suddenly facing bankruptcy or liquidation. Recent news affects stores with long histories in jewelry, drugs and menswear:

• In Indiana, Chronister Pharmacy is losing its last outlet. This location has been active for 58 years, and has gone from being a family-run business to a division of Kroger. Customers are being directed to Walgreen's.
• Bromberg & Co., a 110-year-old jeweler in Birmingham, Alabama, has closed its 46-year-old retail store in reaction to the economy.
• Midwestern men's retailer Al Baskin has filed for bankruptcy and closed its Mark Shale store. It is keeping three Chicago stores open and closing all of its out-of-state locations in April.
  

The fashion world, rocked by the sharp slowdown in retail sales the past six months, is now struggling to stay afloat. In-demand menswear designer Thom Browne is struggling to find a financial backer and battling a drop in retailers' orders for his $5,000 men's suits. The fashion house may have to file bankruptcy if backing is not found soon.

Meanwhile, mass marketeer Marc Ecko is refinancing hundreds of millions of dollars of debt. The lack of liquidity in the financial markets suggests Ecko may have to divest some of its business lines in order to meet the debt obligations.

Pacific Sun, battling the economic slowdown, is opening just three new stores this year and closing up to 150 underperforming outlets. The teen clothing retailer cites the closings as normal business procedure, but the lack of new-store openings means the chain will be shrinking as a result. PacSun recently discontinued its Demo chain to focus on the core business.

The couture design house MGB Squared filed for bankruptcy protection last week in order to keep its business operational. The company designs high-end clothing worn by celebrities and sold at retailers like Saks Fifth Avenue. Industry experts are uncertain that the filing will ensure continuity for the business.

Note: This entry erroneously suggested that MGB Squared designer Eric Gaskins personally filed for bankruptcy, which is inaccurate. Timely Demise regrets any misinterpretation.

Here's an appropriate recession-era gimmick: a store where everything is free. Sure, it's an art installation, but Free Store is living up to its name, complete with transactions and sales receipts. Patrons are encouraged to drop off their own merchandise for the store to "sell," replenishing the supply. The store, in lower Manhattan, is open through the end of March.

Apparel manufacturer VF Corp. has completed the purchase of Mo Industries, the maker of the Splendid and Ella Moss clothing lines. VF already owns a wide variety of clothing lines, from John Varvatos to Wrangler. The former Mo Industries lines are expected to do $70 million in sales this year--after a $95 million 2008 performance.

Tween Brands, which bought the Limited Too chain in 2007, is closing up to 40 of its Justice stores to cut costs. Most of the closings will be in mall locations with store redundancies. Tween's company value is suffering; its stock may be delisted because its market capitalization is below required minimums.

The credit crisis has impaired Sportsman's Warehouse, a regional outdoor-products retailer in the west. The company is selling 15 of its 67 stores to UFA of Canada, but UFA has not closed the sale. As a result, Sportsman's Warehouse is experiencing a liquidity crisis, and must close 23 of its remaining stores. "We are now a 29-store chain," says CEO Stu Upgaard. The store closings affect a wide swath of states from Idaho to Mississippi.

Ann Taylor is expanding its restructuring program and identified more store closings for 2009. The company--which is not restructuring under bankruptcy bylines--is closing an additional 37 stores in 2009, including 10 Ann Taylor and 37 Loft doors. The overall plan now includes 163 rather than 117 store closings.