As it is, so far this year, some of our most recognized mall shops, such as Z Gallerie, Charlotte Russe, and Gymboree have all filed the infamous Chapter 11 lawsuit. And, according to Coresight Research, as of March, 1,674 stores have already closed this year alone! The culprit for all this carnage can be summed up with one four-letter word: Debt.
Rockport is yet another retail chain that declared bankruptcy in 2018. Do not fear. Uber-comfy Rockport shoes will still exist. “We do not expect the availability of Rockport shoes to be affected anywhere in the marketplace,” according to the company. Rockport has gone through its share of owners, starting with British sneaker company, Reebok. The original 1971 founder and owner of Rockport, the Katz family, sold it to Reebok in 1986. It was later passed off to the German athletic shoe group, Adidas, along with parent company, Reebok. And, in 2015, Adidas handed New Balance and Berkshire Partners the Rockport brand. There it became the Rockport Group.
Next, the dreaded private equity group acquisition. In 2017, Crescent Capital Group acquired the Rockport Group from Berkshire. This was followed by the requisite bankruptcy a year later. The Rockport Group filed with $287 million in debt. Charlesbank Capital Partners, another private equity firm, purchased it out of bankruptcy in May of 2018 for $150 million. The responsibility of Rockport retail and e-commerce business’ seamless continuation is now under Charlesbank’s guidance. Out of the rubble, all 60 of Rockport brick-and-mortar locations have gone by the wayside.
This big box pet supplies retailer is plagued by the common culprits: stiff competition and too much debt. To tackle online sales competition, PetSmart Inc. went even deeper into debt. The company purchased online competitor, e-tailer site Chewy, for $3.35 billion. That was a big bite! In fact, that particular acquisition was the most expensive online retail store purchase in history.
PetSmart is the world’s largest brick-and-mortar pet supply store. In all, 1,600 stores and 55,000 employees make up the chain that operates throughout the United States and Canada. Also attending the mammoth pet care emporium, is an equally massive debt to the tune of $8.1 billion. The store’s financial stress roots back to a 2015 buyout. It’s been a rough few years (no pun intended). Maybe online sales at Chewy will save PetSmart?
The CVS pharmacy empire comprises over 9,900 stores making it the largest pharmacy chain in the U.S. Some of those holdings will be aggressively trimmed back. In April, CVS announced plans to shutter 46 underperforming CVS stores across 16 states. Gone forever are four CVS stores in California, four in Florida, seven in Illinois (including four in Chicago), and eight in Texas. It’s a small percentage of the company’s properties.
CVS is also slowing its growth. In general, they add 300 stores per year. This year they plan to open just 100, and next year the number goes down to 50. The news was announced on top of a first-quarter revenue growth report. Growing stores is less important now that CVS is moving toward a larger healthcare aspect to its existing business by remodeling stores into what they call HealthHUBs. Compared with Walgreens, which closed 200 stores this year, CVS’ 46 store-closings are a relatively minor issue. Also, according to the company, the cuts were made as a result of lease information and financial performance analysis. No surprise they closed three shops in the insanely high-priced Bay Area real estate market!
The brick-and-mortar vitamin industry has been floundering for years. Vitamin Shoppe is currently looking for a turnaround and Vitamin World filed for bankruptcy in 2017. Vitamin and supplement retail shop, General Nutrition Centers (GNC), so far, has avoided bankruptcy court. Yet GNC has been struggling against an oppressive $1.38 billion in long-term debt. Because of the massive owe, its share price sunk 66% in 2017 as investors expressed a wane in confidence. This, in turn, triggered a restructuring program that is now in place.
To recover profit, GNC closed 200 stores last year and it secured an investment from a Chinese company. As part of the plan, GNC officials received $100 million from Harbin Pharmaceutical Group, a Chinese pharmaceutical giant. In exchange, the Chinese company procured 100,000 shares of GNC stock for just over $4, which, incidentally, has been trading in the neighborhood of $2 to $3 per share. (Perhaps GNC is a wise stock buy?) CEO of GNC, Ken Martindale said that, because of the partnership, the company expects a $200 million increase in revenue over the next three years. International expansion, while scaling back domestic retail stores, is included in their restructuring goals.
The good news is Kmart survived a major bankruptcy. The super discount store emerged from bankruptcy just this year, but it is battered and beat having lost thousands of stores before and during the Retail Apocalypse. But 2018 wasn’t the store’s first brush with bankruptcy. Kmart also filed for Chapter 11 in 2002. Since the more recent bankruptcy in 2018, the chain has been reduced to a measly 200 locations. And yet, more Kmart locations will be shuttered this year.
During the first filing, the chain collapsed and merged with Sears. The recent announcement of store closings affects both stores, and about 26 stores in total will disappear. Many employees will lose jobs, but the actual number has not been released. The parent company, called Transform Holdco., said liquidation sales will go into effect starting August 2019. To find out if a Sears or Kmart near you will be affected by the most recent store closings, or to find a liquidations sale, search by zip code at this WSJ site.
Established in 1898, Bon-Ton department stores survived WWI and WWII, but not the invention of internet shopping. In fact, during WWI, and through the Roaring Twenties, Bon-Ton was in its heyday. In 2018, the York, Pennsylvania-based company closed its 250 stores, liquidated its merchandise, and left vacant large department store-sized leases. It was the largest retail bankruptcy of the year. If you can’t beat ’em, join ’em. Bon-Ton’s post-bankruptcy owner has been operating the hapless store as an online retailer since September 2018. And, hold onto your hats, there are plans to re-establish the department stores, back to brick-and-mortar.
Bon-Ton, the name derived from a British term of the day, of French origin, with references to proper manners and high-society, may once again don storefronts. The company also operated under names, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers. It’s not easy to make it in retail these days, but with the help of large venture capital firms and those plans to relaunch the store, who knows what will happen. The new company announced a reopening of its Chicago Evergreen Park “Carson’s” store on November 24, 2018.
In the biblical version of the apocalypse, some will be saved while others are eternally doomed. As for the fate of Charlotte Russe, its judgment came down swift and decisive in February. A liquidator firm won an auction in bankruptcy court which allowed it to swallow the young lady's clothing store’s $160 million worth of inventory and all its assets whole. Liquidation sales signs were immediately posted as the firm, SB360 Capital Partners, conducted “going out of business” sales. If you have Charlotte Russe gift cards, you’re out of luck. The last day they were accepted was March 21. If you head to the mall, all traces of the retail chain will have vanished—poof—gone.
There were 560 shops, nationwide and in Puerto Rico. Charlotte Russe was founded by Lawrence Merchandising in 1975 with one store in Carlsbad near San Diego. By 2009 the chain had been acquired by a private equity firm, Advent International. Some say a private equity buyout is one step closer to bankruptcy. Retail Dive finds private equity investments in retail can cause unstable outcomes in the long run.
FullBeauty Brands Inc.
FullBeauty holds the bankruptcy crown. The company fell into bankruptcy in February, filing for Chapter 11 protection on a Sunday. By Monday, the case was resolved! It broke the record for the fastest U.S. bankruptcy resolution ever. Like ripping off the band-aid, FullBeauty cut more than $1 billion in debt to $900 million. Months of negotiating predated the filing. As part of the deal, Oaktree Capital Group and Goldman Sachs get a majority equity stake in trade for more capital investment.
FullBeauty Brands is a plus-size specialty vendor that sells men’s and women’s clothing. Some of its catalogs are Woman Within, Jessica London, ellos, KingSize, and fullbeauty.com. Since it’s a mail order and online company, bankruptcy proceedings were less complicated without physical stores to deal with. In October 2015, FullBeauty Brands Inc., was purchased by British private equity firm, Apax Partners. It’s now shared with the above partners as well as Charlesbank Capital.
Stage Stores is another company that has tumbled right off the stock market. In June, the NYSE notified the company of its noncompliance as its share had been trading at less than $1 for over 30 consecutive days.
The full-size department store, on par with Macy’s and JC Penney, also operates under Bealls, Palais Royal, Peebles, Gordmans, and Goody’s brands. Most recently, Stage Stores is transitioning a conversion to Gordmans. The off-price Gordmans stores outsold all other brands, Stage Stores included. Over 70 Stage Stores will be converted to Gordmans this year. On top of this, the company plans to shutter 40 to 60 Stage Stores. Stage Stores is a Houston-based company with stores in the South, Midwest and across the East coast. In total, the company operates about 688 stores.
The Retail Apocalypse stretched back to 2017, but Office Depot’s financial woes stretched back even further. Competition to sell bulk office supplies has been fierce due to competitors like Costco and Staples, and because of the technological shift which has lowered the demand for paper-based office products. It got so bad that Office Depot hoped Staples would buy them out in 2015. The acquisition didn’t pass antitrust muster and Office Depot looked elsewhere for help.
So, finally, by 2016, despite the Staples acquisition falling through, Office Depot began to pull a profit. This occurred ever since a 2013 merge with OfficeMax and other reshuffling was put into place. For instance, Office Depot closed 400 stores in 2016 and has moved toward service-based products like their new BizBox platform available since the new CompuCom acquisition. A recent collaboration with Alibaba Group is widely believed to benefit both companies and has helped bring a positive outlook for Office Depot stockholders.
BKH Acquisition Corp.
BKH Acquisition Corp. owns and operates more than 100 Burger King fast food diners in Puerto Rico. A BKH Subsidiary, Puerto Rico-based Caribbean Restaurants, is responsible for the day to day operations. In 2017, BKH Acquisition Corp. found its financial rating lowered due to lower poor sales and challenging economic conditions in Puerto Rico. Their malaise was brought on, in part, by Hurricane Maria. BKH seems to be recovering somewhat.
Its financial rating was brought up to a CCC+ from a CCC- in the middle of 2018. The rating change was a result of the Acquisition Corp. closing on a new term loan for debt which was coming due this year. With lower risk for default, the company’s negative risk factors were thereby lowered. If Puerto Ricans continue to dine at Burger King, the investment should stabilize.
Ah, Build-A-Bear. The mall shop established for no other reason than ensnaring unwitting parents, who are just minding their business trying to get some shopping done, into paying an absurd amount of cash for a dumb stuffed animal—shh, don’t tell the kids the bears are dumb!
Imagine the disappointment when Build-A-Bear’s fourth-quarter earnings took a dump, and CEO Sharon Price John said the company will have to close 30 stores. (Is that all?) This, over the next two years. And the bear stuffers are not taking profit losses laying down. No! They plan an aggressive campaign of bringing pop-up Build-A-Bears to Walmart locations. Because Walmart-shopping parents can surely afford to toss a percentage of their hard-earned paychecks into a completely useless product. Of course, food for a week could have been purchased, or at least a 24-pack of toilet paper. And it’s not just Walmart. FAO Schwarz in NYC even allowed the brand within its doors. And, finally, Build-A-Bear will partner with Great Wolf Lodge, an indoor water park resort. Heads up!
Abercrombie & Fitch
In its heyday, Abercrombie & Fitch epitomized the brand appeal the under-30 crowd longed to don. Since then, A&F seems to have met its descent toward “just okay.” In all, 475 A&F stores have shut their doors in the past eight years. Last year it closed just under 30 stores, and this year 40 stores are on the cutting block. The closures include Hollister, a brand A&F owns. The massive downsizing of stores and square footage extends to its latest growth model. After closing 40 standard stores, 40 new, smaller “more intimate” stores and kiosks will be opening. Square footage is being reduced by about 2%.
The store closure announcement followed a disappointing sales growth and future sales outlook report. The company owns 850 stores throughout North America, Europe, Asia and the Middle East. Of those, the Hollister four-story mega-store in New York’s SoHo neighborhood is being closed. It’s not the only flagship store scheduled for closure. The Hong Kong store is slated to be gone, as well as, the large A&F flagship stores in Milan, Fukuoka, Japan, and Copenhagen. According to Forbes, CFO Scott Lipesky said that the remaining 15 flagship stores are a burden on financial results. Bigger is not always better now that e-tail is in ascendance.
Foot Locker, another victim of the ongoing ghost-town effect on malls, closed 110 stores in 2018. The Manhattan-based company reported a $49 million net loss that year and scrambled to stop the bleeding by slashing stores. This year, 165 more Foot Locker locations will close globally.
Cutting back on stores may have helped. In sharp contrast to 2018, Foot Locker beat its earnings goals by double in 2019. Billed as a miraculous turnaround, the company saw a 2% rise over 2018, defying the onslaught of the mall-based Retail Apocalypse. The company, founded in 1974 by Woolworth and Kinney Shoes, operates in 28 nations around the world with over 3,000 locations. Its first store opened in California at the Puente Hills Mall. It’s still open today. Nowhere to go but up!
Southeastern Grocers filed for Chapter 11 bankruptcy in March of 2018, but it wasn’t the first time. By 2010 the company survived its first bankruptcy filing. As one of America’s largest private companies, it runs BI-LO, Harveys, Fresco y Más and Winn-Dixie grocery stores, with most of its stores located in the southeastern states, as the name implies. However, the company formerly went by the name B-Lo Holdings until a 2013 restructuring move changed the Jacksonville, Florida-based company to Southeastern Grocers.
Today, as it emerges from its second bankruptcy filing, store closures are a big part of the company’s financial restructuring. All told, 94 stores will be closed. Southeastern Grocers has already informed workers that 22 of its BI-LO, Winn-Dixie and Harveys markets will be first to go under the ax, but they do not want to talk about just how many jobs will be lost. The company employs 66,000 people.
Last year, Moody’s adjusted Bluestem Brands rating outlook from stable to negative. This year, the company is “streamlining” its business. To that end, the company shed six of its thirteen brands. Those laggards include Bedford Fair, Gold Violin, Norm Thompson, Sahalie, The Tog Shop, and Winter Silks.
In exchange, the company will focus on its core brands: Appleseed’s, Blair, Drapers & Damon’s, Haband and Old Pueblo Trader. According to Lisa Gavales, CEO of Bluestem Brands, “We believe that increased focus in our most productive brands will enable us to drive future sales growth and sustained profitability for not only the Orchard Portfolio, but Bluestem as a whole.”The stock has been haunting the $0.40 to $0.50 territory, with a $0.41 all-time low, in February. A buying opportunity?
Lands’ End lost its way. It floundered through an ill-fitting partnership with Sears from 2002 to 2014, it was led astray by former president, Federica Marchionni, into a trendy high-end parlay, and, now, Lands’ End is back home in the steady hands of CEO Jerome Griffith. New CEO, Griffith, has achieved growth by prioritizing Lands’ End’s e-tailing division and partnering with Amazon (gasp!). But it’s working.
By the end of 2018, Lands’ End reported six straight quarters of sales growth under Griffith’s leadership. He plans to grow Lands’ End by opening up to 60 new stores in the next four years. His ambitious goal is to raise sales to $2 billion by 2022. May the comeback of Lands’ End forever deliver the company from the fate of the Retail Apocalypse!
In the name of “growth and profitability,” Chico’s parent company, Chico’s FAS, Inc., plans to turn the lights out on at least 250 stores over the next three years. The trendy, upscale-fashion go-to spot for women over 30 made Fortune magazine’s “100 Fastest-Growing Companies” list in 2001. But today, Chico’s FAS is in decline, trading at around $3 on the NYSE. Other stores under the umbrella of Chico’s FAS, Inc. include White House Black Market and Soma. Those stores were acquired in 2003 and 2004, respectively.
Chico’s has an endearing founding story. The original shop in Sanibel Island, Florida opened in 1983. The little hole-in-the-wall featured Mexican folk art and gift items. Called Folk Art Specialties (the acronym for FAS), the store began selling sweaters which became so popular they outsold all other items. As Chico’s transformed into a women’s clothing boutique, the owner renamed it Chico’s after a friend’s pet parrot. The first chain store opened in Minnesota, and, over 1,400 stores later, Chico’s had a good run. Other measures meant to enhance the company’s profitability include partnering with Amazon and QVC to bolster sales. If you can’t beat ’em, join ’em!
Plagued by helium shortage and prolonged underinflated earnings, Party City has been shutting stores. The New Jersey-based party store missed on earnings earlier this year and is looking toward the Halloween and holiday season to give it a reason to party.
But not yet. In May of this year, the company announced plans to shutter 45 stores. In total, there are 870 Party City locations. Now, the total number of stores slated to close is up to 55. It represents 5% of total stores in the U.S. and Canada. CEO of Party City, James M. Harrison expects a $2.4 billion rise in revenue for 2019. He optimistically stated, “We are in a very strong in-stock position for the key Halloween selling season. . .” The company also announced it will be trimming more fat by selling its Canadian Tire Corp division which comprises a total of 65 stores. On the upside, helium shortages will no longer cause Party City to be a party-pooper. A new source of helium has been procured. It will reduce the squeeze on latex and metallic balloon sales, according to CEO Harrison. Other stores operating under the Party City franchise include Halloween City, Toy City and Factory Card & Party Outlet.
Guitar Center has been in business for over 50 years and it plans on vending guitars, and every other instrument you can think of, for another 50 years. To that end, the company’s been building and refurbishing. It added 30 brand new Guitar Center locations. Most conspicuously, it refurbished its flagship Hollywood store, spending $5 million on the project. A grand reopening included a D.J. block party in the store parking lot. The message? ‘We’re not going anywhere.’
The hands-on musical instrument store includes music lessons and practice studios. The company is currently $1 billion in debt with the debt load coming due in 2021 and 2022. With 286 locations, Guitar Center is the world’s largest instrument store. Last year, rumors of Guitar Center falling victim to the bulk-bankruptcy fate of so many other retailers were unfounded. The company’s $1 billion debt triggered the rumors, but it was able to renegotiate those loans. CEO Ron Japinga said there were a few years when the company was “kind of going sideways.” But, the CEO said, “We’ve got a clearer vision of what we’re here for. . . [and, the company has] really started to turn the corner.”
Toys “R” Us
Toys “R” Us is a vastly different story. Chock-full of doom and demise, this company dove off the precipice to a savage end, exploding in balls of fire visible from space. Toys “R” Us is the third largest retail bankruptcy ever. The mega-toy store crashed and burned under $5 billion worth of debt. It was an ugly ending. Toys “R” Us filed for bankruptcy in 2017. All did not go well. Hoping for a 2017 holiday sales lift from the September bankruptcy filing, plans backfired.
Instead, it was a devastating holiday season decked with a massive IT failure, enraged customers and a boatload of competitors waiting in the wings. In 2018 the company announced it would close all 800 of its stores, liquidating 33,000 jobs. We’re going to miss that adorable giraffe. And, finally, a restaurant hanging on for dear life.
JCPenney, the large department store chain found at one of nearly every suburban mall entrance wings, may be going away. All 864 nationwide locations. While JCPenney declined to get into just how much it’s forecast to lose this year, it did announce 27 more of its department stores will be shuttered. Revenue for 2018 was down, significantly. Nine of the closures will be of its home and furniture locations. JCPenney has been bleeding employees and stores since 2014. No word on how many jobs will be lost this year. The company did say that laid-off employees will receive “benefits,” like job search assistance and help with resume writing.
JCPenney picked up a new CEO last year, Jill Soltau. Soltau’s efforts to turn the debt-heavy department store chain around include getting out of appliance sales and focusing on apparel. While appliances have been expected at stores like JCPenney and Sears, the $4.2 billion debt needed to be relieved somehow. Cutting 2,200 jobs and closing a total of 8 stores, as it did in 2018, also lowers costs. After 117 years of retailing, all the king’s horses, and all the king’s men may not be able to restructure JCPenney again.
Two days before Kiko filed for bankruptcy, A’GACI slipped over the brink. On January 9, 2018, the trendy-chic fashion apparel company filed to reorganize. For girls and young women (and, yes, millennials who self-identify as female) there is a light at the end of A’GACI’s tunnel. By August of 2018, the company reemerged with a plan to maintain business as usual. Affordable fashion, always on-trend, will be available at all 27 of its existing locations.
As the chain used to offer 76 brick-and-mortar options, it’s a pretty big hit, however, David Won, A’GACI’s Chief Merchandising Officer is optimistic. “We are especially excited about next season’s fashion which we have begun to roll out at a number of stores.” Won continued with this ray of hope, “If we can meaningfully improve our rent costs, it is possible that we will keep a large number of stores open.”
Fred’s is a bargain pharmacy that used to give dollar stores and Walmart a run for their money. The Tennessee-based company has been in business for 70 years, but investors fear it is on the brink of bankruptcy. Today share prices hover below $3 per share, and, against a 2-year high of $20.20, the company’s value has a steep climb ahead of it. On the upside, a massive restructuring is underway. With a new CEO at the helm, Fred’s is selling off some of its assets, repaying debt and implementing significant cost-cutting measures. Recently, CVS purchased Fred’s three specialty pharmacy stores, and they say they have plenty of other non-core assets to sell.
Since then, several hedge fund companies increased their investment in the pharmacy signaling Fred’s may avert a bankruptcy filing. Royce & Associates, a large, institutional investor, picked up almost 2 million shares of Fred’s in the last quarter of 2018. In January, Walgreens purchased 185 of Fred’s 650 retail chains. Next time you go to Fred’s, the sign may read Walgreens instead!
Bebe is another store that has fallen victim to lagging mall traffic. But it has other problems as well. Sales were abysmal. Bebe had been struggling for years. In May of 2017, the company announced it was closing all 180 of its retail outlets and liquidating all merchandise. Bebe was able to move sales into the e-tailing marketplace, thus avoiding a bankruptcy filing. Uniquely, Bebe had very little debt plus a good amount of cash. This helped the company get out of its mall leases relatively easily. They were able to offer the leaseholders a better deal than bankruptcy court would have.
As far back as 2010, the 1976-established brand appeared to be losing to lackluster. Founder and CEO of the skimpy-sexy Bebe-wear chain, Manny Mashouf, seemed to lose his way and navigated the company in a direction his shoppers abandoned. His ex-wife, Neda Mashouf, left the company as vice chairman in 2008, things went downhill from there.
David’s Bridal is yet another mall shop that has succumbed to massive debt. Last year the company filed for bankruptcy protection, cutting a deal to reduce its debt by over $400 million. Do not worry. David’s Bridal will keep its doors open during the reorganization period. Its 300 stores will continue to operate as usual. In order to ensure this, the bridal shop was purchased from former owners, Clayton, Dubilier & Rice, by a group of lenders including Oaktree Capital and Conshohocken.
In case you’re wondering why David’s Bridal racked up so much debt, they will tell you. It’s the fault of Millennials. When all else fails, blame the Millennials. Apparently, folks of the marrying demographic, who we call Millennials, have been waiting to get married. Not only that, but when they do opt for marriage, they choose nontraditional styles. The other culprit is online shopping, naturally.
Tops Market is another company that filed for bankruptcy in 2018. Nine months later, the Amherst-based grocery chain came out on top. Its new deal included negotiating employee pensions with unions and cutting interest payments from $80 million to $55 million a year. Closing 10 of its slowest stores was also included. Frank Curci, who is staying on as Tops’ CEO, said, “We are moving forward as a stronger company.” To that end, he cited services, such as, “Tops Grocery Pick Up” which allows shoppers to buy online.
The longevity of Tops Market remains to be seen, as, while the debt load has been lowered, the interest paid is significantly higher. And, competition hasn’t changed. Specialty grocers like Whole Foods and Trader Joe’s are not going away. Traditional supermarkets like Tops have been struggling against such stores for years. As for the 10 stores that closed, Tops found jobs for all 600 employees affected by the store closings.
Lowe’s announced its plan to shutter 51 of its big-box hardware stores in December 2018. Of the 51 stores that closed, 20 were located in the U.S. and 31 in Canada. The company reported it wants to focus on “its most profitable stores and improve the overall health of its store portfolio.” After the closures, Lowe’s still operates over 2,000 locations in the U.S. and Canada. The closings are just part of “building a stronger business,” according to CEO Marvin Ellison. Also, the closures occurred in stores within a ten-mile radius of another Lowe’s store. Just a little belt-tightening and efficiency improvements, it seems.
The latest cost-cutting measure is a massive layoff. The company announced plans to implement an unspecified number of layoffs in August. The number of workers losing jobs is expected to be in the thousands. The vigorous belt-tightening tactic will primarily impact workers in product assembly departments. In total, Lowe’s employs about 300,000 workers. At the end of the day, with Lowe’s recently reporting a lower profit outlook for the remainder of the year, one can’t help but wonder if more store closings will be announced this December.
Vitamin Shoppe is GNC’s top competitor. Both companies are mired in the same retail nightmare. Vitamin Shoppe watched its stock price plummet over 80% in the past three years. Sales slid downward for two years straight.
The company’s 2019 outlook includes opening ten new stores but also closing 60 to 80 underperforming stores over the next three years. One goal is to increase e-commerce, and, in 2018, they increased online sales by almost 19%. According to some analysts, Vitamin Shoppe’s long-term prospects may be improving. For the year, there’s been a 76% increase in its stock price.
The exodus from mall shopping to outdoor shopping pavilions has taken its toll on many retailers. Department stores like Sears, JCPenney, Nordstrom and Macy’s have felt the pinch. Neiman Marcus has not fared much better. The luxury department store founded in 1907 is suffocating under $5 billion of debt. The company has lost money for two and a half years straight. On the other hand, the folks at The Motley Fool believe a slow comeback may be brewing. With the luxury market improving over the past year, positive signs exist. However, they point out that hopes are not too bright under the company’s heavy debt load. All of this brings concerns that Neiman Marcus may be up for sale soon. Some speculation guesses that it will be absorbed by Saks Fifth Avenue’s Hudson’s Bay parent company.
Neiman Marcus CEO and President, Karen Katz, blames decreasing sales on social media and “fast fashion.” Access to fashion shows used to be exclusive, now anyone can tune in. Katz said, “Today fashion shows are now blogged and broadcast all over the world via social media. By the time the merchandise ships many months later, the newness and excitement have worn off, and in many cases, the customer has moved on.”
Whole Foods Market
Ever since 2017, Whole Foods Market has been owned by Amazon. The original Whole Foods Market was established in Austin, Texas, way back in 1980. If you think the 2017 merger has allowed the company some protection from the Retail Apocalypse, you’re probably right. While Whole Foods accounts for only 3% of the total grocery store market, it’s got the e-commerce Godzilla on its side. And, Amazon plans to expand within the grocery market sector because, why not? Another benefit for Whole Foods is that Amazon is positioned to absorb some losses in order to keep its grip on the grocery division.
Amazon is letting go of only one of its 500 Whole Foods stores this year. Namely, the Vancouver store, the only Whole Foods Market in Vancouver. The most significant store closings, however, are of Whole Foods Market’s smaller, lower-priced brand called 365. All 12 of the 365 stores will close this year. It’s not a loss for the parent company; each 365 market will be converted into a full-size, higher-priced Whole Foods Market. It’s a win-win for Mr. Jeff Bezos, Amazon and Whole Foods Market’s supreme overlord.
99¢ Only Stores
One of the first competitors to then-thriving dollar-discount chains, upping the ante to just under a dollar, 99¢ Only Stores opened in 1982. Now, they are facing elimination by such competition as Dollar Tree and Dollar General. Family Dollar is facing the same fate, closing 390 stores this year. And it’s not just an oversaturation of dollar-or-less stores, the competition also comes from Walmart and, of course, Amazon. “We’re not a dollar store, we are an extreme value retailer,” 99¢ Only Store CEO Jack Sinclair says, separating his company from the pack. Sinclair believes that the company can double its growth to $4 billion relatively quickly.
Sinclair says this as former Executive Vice president of Food at Walmart. Maybe he knows what he’s talking about. Hopefully, 99¢ Only Stores will make it, but financial analysts only give the store a 50% chance of survival. To compete, the store is now offering more produce and other perishable grocery item foods.
Gump’s is gone. Like a gaping void in San Francisco’s vibrant retail center, the flagship store, along with its massive, iconic Buddha sculpture that has greeted customers of Gump’s for 157 years, simply does not exist anymore. Gump’s: Established in 1861, liquidated in 2018. The luxury department store had searched for a buyer to save it, but with no takers, it succumbed to bankruptcy in August of 2018 instead. The store, which was around during the California Gold Rush and was rebuilt after damage from the 1906 earthquake, closed for good on December 23, 2018. All is lost.
Website and Gump’s By Mail catalog sales are no longer accepting new orders. In the past, while online and catalog sales were still humming, the website and Gump’s By Mail accumulated north of 75% of its sales. It’s an unusual case. Online competition, not a problem, but it was liquidated anyway after bankruptcy protection fell through. It was a unique store. Gump’s is gone and it’s irreplaceable.
Like TJ Maxx and Ross, Stein Mart is an off-price retailer that bargain hunters love to haunt. The chain of 290 stores carry brands at value prices, but lately, the store has been looking for ways to boost sales in order to add value to its bottom line.
Surprisingly, in 2018 the store was able to raise sales, in spite of the year-end holiday let-down totals. Contradicting their efforts, Stein Mart, trading symbol SMRT on NASDAQ, is dirt cheap. At around $1 per share (or less), it’s either a lucrative investment or a loss into liquidation. Money reports that Stein Mart has a high probability of default. If Stein Mart defaults on its debt, it goes into bankruptcy. On the other hand, while the store was predicted to fail in 2018, it’s still here.
Many moons ago, when across this great nation, retail shopping centers did not yet exist outside of large cities, Americans depended on the new-fangled Sears Catalogue. Sears invented the order-by-mail, catalog version of Amazon one hundred and thirty-three years ago. It was in 1886 the company began driving rural, general stores out of business. It seems the cycle has gone full circle. Today, Amazon brings the convenience of mailed merch worldwide, applying a serious ding to brick-and-mortar retail stores. Sears is but one in the growing list of retailers struggling to exist, and, in fact, as a department store retail chain, it has been clinging to its existence the longest. Blaming Amazon for the Retail Apocalypse beats the alternative reason—the “R” word—a Recession.
In October, Sears filed for Chapter 11 bankruptcy with $11.3 billion in liabilities and $6.9 billion in assets. At least 200 stores have closed. The company also ceased selling its flagship Whirlpool appliances, a product the store carried since 1916. Eddie Lampert, the hedge fund giant who purchased Sears in 2005, and has manned its gradual downfall since then, hopes the bankruptcy filing helps. Lampert said the filing should “[Enable] the Company to accelerate its strategic transformation, continue right-sizing its operating model and return to profitability.” Hope runs eternal.
Alas, Nine West is gone. Last year, Nine West buckled under its heavy $1.6 billion debt and filed Chapter 11 bankruptcy. The courts approved the sale of its $340 million shoe business to Authentic Brands Group, owner of the Juicy Couture and Aéropostale brands. But, though the storefronts are gone forever, Nine West, which owns brands like Anne Klein and Gloria Vanderbilt, will maintain the operation of its jewelry and apparel businesses, including Anne Klein. It seems, the 1970-established shoe manufacturer got swept up in the retail end-times that is decimating malls all over the nation.
Due to the bankruptcy proceedings, all 70 of Nine West stores were forced to close, but the agreement allows Nine West wholesale sales to continue, as well as online sales. It’s sad to see one of the best shoe brands, ever, go by the wayside, but, under the Authentic Brands Group, perhaps the shoes will yet be sold, one way or another.
According to Macroaxis, Ascena Retail has a 42% chance of going into bankruptcy. Ascena Retail covers more retail shops than you might expect. The company owns Justice, Lane Bryant, Ann Taylor, Lou & Grey, LOFT, Dress Barn, Catherine, Cacique and Maurice stores. All told, they run 4,500 stores nationally, with shops in Canada and Puerto Rico too. Adding to Ascena’s financial woe, 2018 holiday sales missed expectations, especially with their “value” brands.
To help Ascena’s bottom line, the company sold 943 Maurice “value” stores to OpCapita, a London-based private equity, for $300 million. The New Jersey-based company plans to use the proceeds to pay down debt and reinvest in Ascena. CEO David Jaffe says he hopes these structural changes in his company will create more value for its shareholders.
The Gap has closed hundreds of stores in the past few years. In 2017 alone, it closed 200 Gap and Banana Republic stores. The Gap, Inc., founded in San Francisco in 1969, owns Banana Republic, Old Navy, and Athleta stores, as well as its namesake brand. But the Gap, company-wide, has been sliding into oblivion. To put it into perspective, the Gap has trailed behind Victoria’s Secret’s loser, L Brands.
Once one of the coolest brands on the planet, today Gap is announcing it will close 230 more of its namesake stores in the next two years. Fifty of those stores will close in 2019. The company estimates it will lose about $625 million as a result of the closures. On the other hand, it will ultimately save approximately $90 million. One ray of hope is the Old Navy brand, which is outselling all other Gap store brands. The most current plan is to separate the company into two publicly traded divisions. Old Navy will now exist as its own company, and the second company will be a conglomerate of the remaining brands: Gap, Banana Republic, Intermix, Athleta, and Hill City.
National Stores Inc.
National Stores Inc. is a relatively small discount clothing chain with about 344 locations. Correction. It had 344 stores. That was before it filed for Chapter 11 bankruptcy in August of last year. Since then, 74 shops were shuttered with liquidation sales closing doors for good. Some of the shops involved in National Stores closings are Fallas, Factory 2-U, Weiner’s, Conway and Anna’s Linens. The stores’ negative profitability was attributed to a down-retail environment and lost revenue from Hurricanes Harvey and Maria.
On top of that, there was a data breach which cost the company about $4.4 million. With $108 million in post-bankruptcy financing, National Stores is hoping to reemerge as a robust company. According to its CEO, Michael Fallas, “National Stores, historically a profitable company, is committed to improving its financial health and returning to profitability.”
Neither will she be receiving a diamond ring. Signet Jewelers, home of Kay Jewelers, Zales, Jared, the top mall brands, is faring even worse than Victoria’s Secret. In three years, Signet plans to shrink its mall presence by 13%. It’s well on its way. Last year Signet Jewelers shuttered 262 stores, most of them located in the U.S. And in April, after a disappointing earnings report, the company announced plans to close 150 more stores. Most of the stores targeted are located in underperforming malls. Shopping malls, in general, have lost tons of foot traffic, causing some to fear malls will go extinct.
Signet Jewelers is the world’s largest diamond retailer with more than 3,500 locations. Despite the 2% drop in sales, CEO Virginia C. Drosos remains optimistic. In a statement, she said the company is progressing with e-commerce growth and “building foundational capabilities to drive future growth.”
Barneys New York
Barneys did not have a good year. A $34 million dive in revenue from February to June landed the luxury department store company in bankruptcy court. Barneys New York filed for Chapter 11 protection in August. Exacerbating Barneys’ dire circumstances, retail space lease obligations have skyrocketed. The company now owes over $10 million more in rent payments this year than it did last year. Full-size Barneys department stores in Seattle, Chicago and Las Vegas will be shuttered, as well as some smaller stores. The worst-case scenario? Barneys may end up completely liquidated. It all depends on how well the bankruptcy process fares. For instance, if the store acquires a buyer, things could level out.
The century-old retailer launched with a sophisticated New York-chic discount appeal. As legend has it, Mr. Barney Pressman pawned his wife’s engagement ring in 1923 to procure the cash for opening a men’s clothing storefront on Seventh Avenue. It’s always been about style and panache. In the 1970s, Barneys added women’s apparel. But it wasn’t until the 1960s when a shift toward men’s designer fashions transitioned Barneys to its contemporary luxury presence. To assuage the brand’s “cool” appeal, Barneys recently opened a luxury cannabis lifestyle boutique called The High End (get it?). It’s located in swank Beverly Hills.
Saks Off 5th
Saks Off 5th is the Nordstrom Rack of Saks Fifth Avenue luxury department stores. The offshoot was launched in 1990 and has become a popular high-end outlet store with over 100 locations nationwide. When Canadian retail giant Hudson Bay Company (HBC) acquired Saks Off 5th, along with its parent company Saks Fifth Avenue, it expanded both chains into Canada. HBC also expanded Saks Off 5th to Europe.
Most recently, HBC is scaling back the expansion, closing all of its European and Canadian stores and thinking about trimming the fat in the U.S. as well. Although there are no official details, HBC is estimating that 20 U.S. locations are on the cutting block. The move is part of a streamlining and growth effort, according to Saks Off 5th CEO Helena Foulkes.
E-commerce is affecting nearly every brick-and-mortar sector. Retail has been hit the hardest, and Nordstrom is no exception. Despite the fact that the luxury giant has weathered the e-commerce threat relatively well, closing only a handful of stores during the Retail Apocalypse thus far and claiming to maintain profitability in all of its stores, this year is different. Three full-size department stores have already been shuttered in 2019. Since then, Nordstrom announced four more closures. Seattle, San Francisco, Clinton Township, Michigan, and Anchorage will all lose the admired Nordstrom presence. The loss of the Anchorage store means zero Nordstrom options for Alaska as Anchorage was its only property. 2019 brings the largest number of store closures yet. Nordstrom is closing more stores this year than the last three years combined!
On the other hand, Nordstrom has developed a robust e-commerce enterprise. According to The Motley Fool, the store’s digital sales brought in 30% of total sales, with nowhere to go but up. Sales are continuing to rise. Cutting back on lower-performing brick-and-mortar stores with the recent store closings is a strategic effort by the family-operated corporation to maximize future profitability.
Eddie Bauer retail stores did pretty well during the late ‘80s into the ‘90s with its rough, outdoorsman wear. Founder, Eddie Bauer, invented the quilted down jacket in 1940, and plenty other flannel-centric sportswear—becoming the U.S. Army’s clothier for WWII airmen, and beyond. The Army even allowed the company logo on its servicemen’s standard issue gear. And, what about Ford? The Ford Motor Company used the Eddie Bauer logo to designate certain vehicle models. In 1984 they came out with the limited edition Eddie Bauer Bronco.
Once the 2000s hit, the company became increasingly riddled with financial woes. It filed for bankruptcy, for the first time, in 2003. In 2009, it was back to bankruptcy court. It survived both filings. Competition is tough against outdoors brands like REI, L.L. Bean and North Face. Some analysts date Eddie Bauer’s financial woes back to 2009 when the store shifted to women’s sportswear. Since then it’s tried to move back to the rugged testosterone-inspired styles, but the debt is just not going away. Eddie Bauer was looking for a buyer back in 2014, and, once again, it’s been looking for a new owner to run its 370 stores and take over its $400 million coming due this year.
One store at risk for a 2019 bankruptcy is J. Crew. Their problem? A $2 billion debt issue. Of course, they made some mistakes that caused shoppers to buy elsewhere, but, in the end, it added up to a net loss of $125 million for 2017. To put their debt issues in perspective, the company pays $30 million per quarter in interest payments to pay down their debt.
The Los Angeles-based company started out as a specialty catalog retailer. J Crew’s niche rugged outdoor wear designs caught on, and by the 2000s the company offered brick-and-mortar stores. For some reason, they tried an upscale appeal, and their effort, like the proverbial last straw, sank the ship. The company’s CEO left, and the new CEO is restructuring with hopes to bring shoppers back. Maybe J. Crew will go back to its order by catalog roots? Or will it survive the retail-space race?
The Walking Company
The Walking Company is another comfort-wear shoe brand to succumb to a 2018 bankruptcy. However, this company walked away with most of its stores intact. Down 23, The Walking Company’s 185 operating stores will remain attached to their leases. The company expects the reorganization to position it for “long-term success.” It wasn’t the first bankruptcy filing for The Walking Company. In 2009 the company needed protection after a rapid expanse of stores met a lagging economy in the midst of the 2008 Financial Crisis.
Then, in 2018, it filed for what is coming to be known as “Chapter 22 bankruptcy” as more and more companies are filing for a second bankruptcy. To confront competition from online e-tailing, The Walking Company launched a website. Since a 2016 acquisition, it has owned and operated the FootSmart website and catalog. The high-quality, comfort footwear retails brands like Dansko, ECCO, Taos, and ABEO.
Mattress Firm stores are closing. Will a location near you vanish? In addition to the Retail Apocalypse statistics, Mattress Firm is the nation’s largest mattress company to file for Chapter 11 bankruptcy protection. Nevertheless, the Houston-based sleep chain made short work of it. Filing on October 5 of last year, just over a month later all proceedings were in line.
To be exact, by November 11, executive chair and CEO Steve Stagner announced, “This is an exciting day for Mattress Firm as we emerge a stronger and more competitive company.” Its reorganization includes shuttering 700 under-performing stores, leaving a remaining 2,600 in operation. The company also secured a $525 million cushion for operations and growth within the agreement. Back to the business of beds.
Brookstone survived a 2014 bankruptcy filing after a Chinese conglomerate, Sanpower, purchased it at auction for $173 million. But it didn’t survive the 2018 retail apocalypse. Or, as the company says, it could not overcome an “extremely challenging retail environment at malls.” Except for its 35 airport stores and Brookstone.com, the entire chain of 101 mall stores is now closed. The mall stop that gave shoppers a break to gawk over Brookstone’s quirky gadgets, or check out the massage chairs, will be sorely missed. Brookstone helped launch brands like iRobot and Fitbit. Brookstone was founded in 1965 as a catalog company offering hard-to-find tools and other unusual devices.
The novelty of the store’s originality has been made somewhat obsolete by the vast array of online products. The first store opening was in 1973. In the ‘90s Bain Capital, led by Mitt Romney, took the company public. In keeping the more profitable airport stores running, they were able to secure a buyer. BlueStar Alliance bought it out of bankruptcy for $72 million. The plan is to expand Brookstone’s wholesale market. The company plans to continue selling Brookstone gadgets on shelves at stores such as Macy’s, Bloomingdales and Bed Bath & Beyond.
A double-whammy. In April of 2017, Payless filed for bankruptcy and attempted to salvage the chain by getting rid of 700 stores and $435 million in debt. Its efforts tanked. This year, by April, all stores closed, as per a second bankruptcy ruling filed in February 2019. Two bankruptcies in less than two years. What’s left of the company is $470 million in debt and 2,500 vacant shoe shops.
Of note, the liquidation of all its stores is the largest liquidation event in U.S. retail history. E-commerce options for Payless Shoes will also disappear. Gift cards are invalid. The Topeka, Kansas company had been selling shoes since 1956.
If your destination is Destination Maternity, it may not be there when you arrive. The chain is shuttering 67 of its stores this year, and up to 280 of its 1,000 nationwide shops will be vacated over the next four years. Destination Maternity is the umbrella maternity store which includes Motherhood Maternity and A Pea in the Pod shops. All of these mall stores have been unable to compete against online retailers.
Their response is to boost their online sales department with goals for those sales to make up 42% of all sales, bringing in up to $200 million a year. To this end, Destination Maternity developed a new Amazon Marketplace storefront and offered same-day delivery in N.Y.C. The company is calling its restructuring efforts “Destination Forward.” Hopefully, it will move in that direction.
This Boston-based Italian restaurant filed for Chapter 11 bankruptcy in April of 2018. Luckily, 58 of Bertucci’s wood-fired pizzerias are still open. Since 2011, the restaurant had seen declining sales, year after year. It was not alone. Most mid-priced sit-down eateries have been struggling to make ends meet nationwide. Rescued from the brink of bankruptcy, Earl Enterprises picked Bertucci’s up for $20 million.
Bertucci’s is now in the company of Planet Hollywood, Buca di Beppo, Earl of Sandwich and Tequila Taqueria. Whew. You can almost hear the collective sigh of New England and East Coast diners. Maybe founder, Bostonian Joey Crugnale, emigrant of Sulmona, Italy, is relieved too. Bertucci’s isn’t going away. Why not Crugnale’s? I guess Bertucci’s just sounded better.
Williams-Sonoma has been making our kitchens and living spaces higher-quality and more inviting for over a half-century. Mr. Charles Williams originally set up shop in Sonoma, California in 1947. But by 1958 he relocated the store to San Francisco where clients like Julia Childs could easily access his array of fine French kitchenware. He expanded to Beverly Hills, adding catalog sales, and then gobbled up Pottery Barn in the mid-1980s. Business thrived until the Amazon-craze nearly flooded him out.
Now Williams-Sonoma execs are doing backflips and other acrobatics to keep the company’s performance levels above water. A recent shakeup finds brand president Janet Hayes resigning and making way for Ryan Ross, executive vice president of various brands at the company. According to Retail Dive, the store experienced a first-quarter bump with sales up 3% over last year, however, the store is slated to close 30 stores in 2019. So far, only two stores in Virginia have closed.
Target is one of America’s most popular stores. With $72 billion in revenue for 2018, an increase of 3.48% over the year before, it’s easy to see why Target is the eighth largest retailer in the U.S. And, even if shoppers are getting tired of the Target brand, the big-box retailer is going nowhere. Well, except for six stores, that is. Chicago’s south side is losing two Target locations. Tennessee, Wisconsin, New York, and Minnesota are also saying goodbye to Target.
However, while six stores are going away, Target plans to open 19 brand new Target locations. On top of that, the company has plans to remodel 300 stores in 2019 and give facelifts to another 300 in 2020. Additionally, the company is opening small-format stores in downtown areas and on college campuses this year. Santa Barbara, Cape Cod, Washington, D.C. and Seattle will all boast of mini-Targets. In an effort to stave off the Amazon threat, Target is adding “Target +,” an online marketplace that rivals Amazon.com.
Fashion and fun have come together at Claire’s for countless years. Many girls will fondly recall shopping with friends or getting their ears pierced for the very first time at the mall accessory shop. Sadly, for all those memories, Claire’s filed for bankruptcy in 2018. On the upside, the store is yet holding onto its chain. Out of its 1,570 stores, only 170 are closing. This, in an effort to manage its $2 billion worth of debt.
Most of the $2 billion debt traces back to 2007 when a private equity firm, Apollo Global Management, purchased Claire’s, buying it out for $3.1 billion. Struggling to repay that debt, the company shelved 150 stores in 2016. Hopefully, Claire’s and its sister store Icing will be around for future young fashion aficionados. Sales were up in 2018 compared with 2017, so hope exists.
Pier 1 Imports
If you prefer pouring money into risky investment endeavors, let me introduce you to Pier 1 Imports. Last year, the niche-import big-box retailer of unique home goods announced it would close 25 stores. Pier 1 then brought in new CEO, Cheryl Bachelder, by the 2018 fourth quarter, and said goodbye to former CEO, Alasdair James. Noting, at the time, that the store is missing on style, value, and selection for their shoppers, Bachelder added, now it’s all about “taking the bold actions needed to restore the health and promise of the business.” And, now that Credit Suisse has their back, maybe Bachelder’s turnaround plan will work. Stacking the deck against her plan is Trump’s heavy Chinese tariffs which tax over half of their imports.
Moody’s, a leading investment analyst firm, however, altered its Pier 1 outlook to “negative” once Bachelder took the helm. On the other hand, Moody’s recognized the company’s relatively light debt load, but then worried about the $251 million worth of debt that will be due in the next two years. If Pier 1 is going to turn around, it better be soon!
According to Forbes, Victoria’s Secret has “lost its sexy.” And, try as it may to regain it, the financial numbers are not adding up. The store hasn’t seen a significant gain since 2015 and has been in morbid decline since 2018.
Victoria’s Secret operates under parent-company L Brands. Together with Bath & Body Works and PINK, L Brands, headquartered in Columbus, Ohio, sells women’s apparel exclusively. The company premiered with Victoria’s Secret in 1977. This happened when Roy Raymond, after becoming frustrated with the limited lingerie options at department stores while shopping for his wife, decided to open a “Victorian-boudoir” themed lingerie store in Palo Alto. He named his new lingerie alternative Victoria’s Secret. It became a worldwide sensation known for fashioning a chic club of the world’s top supermodels. However, plummeting sales is decidedly unsexy. The closure of 30 stores in 2018 was dismal news. 2019 almost doubles it. Earlier this year, L Brands announced it will be closing 53 of its 1,143 Victoria’s Secret and PINK stores. The secret’s out.
Cole Haan, a chic shoe brand that found itself under threat of doom, has not gone the way of Nine West. So far, the men’s and women’s footwear company established in 1928 is staying in operation—as long as the stores that sell it, Macy’s, Neiman Marcus and Nordstrom, are still standing. It also operates over 70 of its own worldwide locations.
Its new owners, private equity firm Apax Partners Worldwide LLP, has taken the company in a new direction. Apax Partners purchased Cole Haan from Nike in 2012 for $570 million. Recently, Cole Haan, known for its dressy stylish look, has navigated its product toward premium comfy casual shoes like sneakers and other lifestyle footwear. While some customers do not like the shift, it seems to be keeping the brand afloat.
Kiko is an Italian makeup and skin care company that operates Kiko USA under its Kiko Milano brand. Out of its 28 U.S. retail locations, 24 are going away. Kiko is yet another victim of the 2018 Retail Apocalypse. The brand that looks for a niche between pricey, high-end makeup products and drug store cheapies dates its woes back to 2016 when a crisis in liquidity hit its bottom line. Sales took a dive. It all came to a head in January of 2018 when it filed for Chapter 11 bankruptcy protection.
Closing its retail locations saves $7.1 million a year. Also, part of its post-bankruptcy playbook is teaming up with Amazon Prime and growing Kiko USA’s e-commerce sales. Additionally, Kiko’s plans to concentrate efforts on making the five existing retail stores more profitable. Whether or not the company executes on their plan remains to be seen.
Donna Karan New York (DKNY) created her brand after serving as head designer at Anne Klein for many years. The company that owned Anne Klein allowed Karan and her husband the opportunity to launch DKNY. They took the chance and founded Donna Karan International in 1989. For 30 years she headed the DKNY brand. She later launched the Urban Zen brand and turned her attention to philanthropy.
Many recognize supermodel Cara Delevingne as the face of DKNY, but Donna Karan was the mind behind the high-end brand. In 2001 Louis Vuitton Monët Hennessy (LVMH) purchased DKNY. In 2015 Karan stepped down. At that time, LVMH sold DKNY to the G-III Apparel Group. The investment group paid $650 million. Now, according to lists published by USA Today and other publications, 41 DKNY stores are closing in 2019. There have been no official announcements.
Francesca’s is a seller of fun and elegant fashions and accessories priced affordably. Francesca’s chain consists of 727 boutique stores. Unfortunately, Francesca’s has failed to pull a profit since 2017. Now the store is in dire-straits and considering selling the company.
According to Retail Dive in their article entitled, “The Downward Spiral of Francesca’s,” the company has been trying everything. A realignment of its executive board shook things up, and now severe cost-cutting efforts are in effect. Twenty stores are on the chopping block this year, and all remodels have been put on hold. What happened? Well, sales dove 14% since last year. Its market price tanked as well. At just under seventy cents per share, Francesca’s stock did so poorly it tumbled right off the Nasdaq! Nasdaq requires $1 and above for trades on its stock market. Francesca’s also implemented a mass layoff at both the corporate and store levels. It cut $15 million a year in budget costs. Here’s to a better year for Francesca’s!