store closings: 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.

Starbucks is closing 300 more stores to deal with slower sales. The announcement comes just six months after the coffee chain announced 600 store closings and a focus on business essentials. Two hundred of the new stores are in the United States, the rest international.

Starbucks, which is fighting mightily to maintain its growth and profitability in the wilted economy, has embarked on numerous initiatives in recent months to boost its brand image. The company has offered free coffee in exchange for pledging five hours of volunteering or voting in the presidential election.

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.

Regional value-and-convenience retailer Pamida is closing 11 of its 215 stores. Pamida cited "a negative drain on earnings" coming from the locations being shuttered. Pamida, which operates mostly in smaller towns, gets hurt whenever a Wal-Mart opens, and the economy's shift toward greater consumer value is forcing the closings.

As a small-town retailer, Pamida's news is indicative of the hyperlocal focus discussed here recently. View the store closing information as reported in Sioux City, IA; Norwalk, OH; southeast Iowa; and Park Rapids, ND.

Home Depot has decided to shut down EXPO, its high-end interior decoration chain. The company is closing all 34 stores as well as five YardBIRDS stores, a small-store format it launched earlier this decade. Home Depot CEO Frank Blake called EXPO "not a strong business" and a resource drain. Home Depot does have 12 store openings planned for 2009 in a modest recessionary expansion.

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.

Candle and gift retailer Yankee Candle is eliminating its Illuminations retail chain as part of a corporate restructuring. Illuminations, a candle and home decorating line, was purchased by Yankee Candle in 2006. The Illuminations brand name may continue in wholesale and catalog options.

Yankee Candle is also closing one additional store under the Yankee Candle name. Plans for new store openings are not affected.

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.

The Milwaukee area is losing its 82-year-old Harry W. Schwartz bookstores due to unavoidable market changes. The stores acknowledge changes in consumer habits, such as e-books and the Internet, as well as the current economic conditions plaguing other businesses. Interestingly, its management believes single-location specialty bookstores may thrive in the future, whereas the small-chain model of Harry W. Schwartz is not relevant in the current environment.

The popular and successful B.R. Guest restaurant chain announced a series of closings as part of a restructuring effort (not, it should be noted, a bankruptcy). "In order to keep our business strong and competitive, we have no choice but to scale back and streamline our company," said president and founder Stephen Hanson.

In New York, B.R. Guest's hometown, the company closed Fiamma, Level V, and this writer's favorite, Ruby Foo's on the Upper West Side. Fiamma and Level V are being converted into event space and a new restaurant, respectively. Blue Water Grill in Chicago is also closing.

The New York Times' Diner's Journal Blog interviewed Fiamma chef Fabio Trabocchi after the announcement. Trabocchi reported sales declines of 25 to 30 percent since the start of the financial crisis.

Home goods retailer Cost Plus is closing 26 stores and cutting back its media plan in 2009. The moves are a reaction to weak holiday sales. Cost Plus is expected to be fiscally sound as a result of the move, which is an upbeat note in the economic environment.

Britain is suffering from the economic downturn in similar fashion to the US. Music retailer Zavvi announced 22 store closings today, citing financial investment--and not consumer demand--as the driving force. Yesterday, retailer Marks & Spencer (similar to Macy's in the US) announced it was closing 27 stores and laying off staff; the century-old chain Woolworth's shut down all its operations this week after a final holiday-season sale. While this page is focused on America's retailers, similar stories are playing out daily across the pond.

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.

Gift and entertainment retailer Blue Tulip is closing all its stores this month as part of a Chapter 11 bankruptcy filing. The chainlet, which operated 24 stores, cited the economic downturn as the usual culprit.

Flatware maker Oneida is closing all 20 of its retail outlet stores in the United States. Oneida, a global leader in flatware dating to the 1880s, will exit the flatware business entirely following inventory clearance sales. The company is instead focusing on its other, more profitable divisions and the marketing of imported flatware.

No official announcement has been made by the company, but Rex is closing a good number of its store this winter, which is garnering attention in local markets. Stores in Pensacola and Tallahassee, Florida; Indiana, Pennsylvania; and Enid, Oklahoma are all entering liquidation sales. Rex was considering a retail restructuring last month but has not issued word on whether these store closings are part of a larger plan. The company sells synthetic fuels and ethanol in addition to operating its 100-plus-door retail electronics chain.

Update, January 13: The Rex in Albany is closing as well.

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.