Bankruptcies, Store Closures and More – WWD
The coronavirus pandemic has taken a particularly harsh toll on many fashion brands and retailers.
Since stay-at-home orders were enacted in mid-March, major companies have struggled to sustain their operations as temporary store closures and many consumers losing their jobs caused marked declines in revenue.
The virus has led to many major retailers and companies, including Neiman Marcus Group, J.C. Penney, J. Crew, Brooks Brothers and more, to file for Chapter 11 bankruptcy protection.
Others have seen significant revenue declines and losses so far this year, including Under Armour, which lost roughly $773 million in the first half of 2020, and Capri Holdings Ltd., which is anticipating a 70 percent decline in sales this quarter after losing $551 million in its 2020 fiscal year fourth quarter.
Here, WWD looks at the fashion companies and retailers that have suffered the greatest impact on their businesses because of the COVID-19 pandemic.
Abercrombie & Fitch Co.:
Abercrombie & Fitch Co. saw net losses widen to $244.2 million in the quarter ending May 2, compared to $19.2 million in the prior year. Net sales fell 34 percent to $485.4 million in the last quarter from $734 million in the year prior.
American Eagle Outfitters:
The company saw revenues in the three-month period ending May 2 slide to $552 million from $886 million the same time last year. The American Eagle brand saw topline sales fall 45 percent, while Aerie’s sales decreased by 2 percent.
Ascena Retail Group
Ascena Retail Group Inc., which operates Ann Taylor, Loft, Lane Bryant, Justice and Lou & Grey, filed for Chapter 11 bankruptcy on July 23. The company had initially furloughed half its corporate staff and cut executive salaries at the start of the pandemic.
Bldwn:
Los Angeles-based fashion brand Bldwn filed for bankruptcy on March 25 after further losses caused by the COVID-19 fallout. The company let go of its entire staff, which included 33 people in corporate roles and 45 associates at its seven stores.
Brooks Brothers:
Iconic brand Brooks Brothers filed for bankruptcy on July 8. The brand entered the bankruptcy process with $75 million in debtor-in-possession financing.
Burberry:
Burberry’s retail sales fell 48.4 percent to 257 million pounds in the quarter ending June 27. Comparable store sales were down 45 percent.
The company has also cut 5 percent of its workforce, which equals 500 jobs. The cuts include 150 office-based roles in the U.K.
Capri Holdings Ltd.
Capri Holdings. Ltd, the parent company of Michael Kors, Versace and Jimmy Choo, is expecting a 70 percent decline in sales during the current quarter after reporting a loss of $551 million in the fourth quarter of the 2020 fiscal year.
Centric Brands:
Centric Brands, which is the licensee to more than 100 fashion brands including Tommy Hilfiger, Calvin Klein and Under Armour, filed for Chapter 11 bankruptcy protection on May 18.
Chico’s FAS:
Chico’s FAS, the parent company of Chico’s, White House Black Market, Soma and TellTale brands, saw revenues during the three-month period ending May 2 fall to $280 million, down from $517 million during the same time last year.
Chico’s FAS Canada, a subsidiary of the company, also filed for bankruptcy in Ontario, Canada on July 30. It plans to permanently close all 10 stores in Canada, which includes four Chico’s stores and six White House Black Market stores.
Creative Hairdressers Inc.:
The beauty company, which is behind Hair Cuttery, Bubbles and Salon Cielo, filed for Chapter 11 bankruptcy protection on April 28. The company operates 750 hair salons.
David Yurman:
The fine jewelry brand cut nearly 100 corporate jobs in July after doing companywide furloughs in April. David Yurman revealed the layoffs affected the brand’s marketing, product development, engineering and finance departments.
Debenhams:
British retailer Debenhams sought bankruptcy protection on April 9. The retailer operates 142 stores in the U.K.
Elizabeth Arden Red Door Spas:
Now known as Mynd Spa & Salon Inc., the business filed for Chapter 7 bankruptcy on March 19, just a few days after closing its locations in response to the pandemic.
G-Star Raw Retail Inc.:
The fashion label’s U.S. retail operations filed for Chapter 11 bankruptcy protection on July 3.
Guess Inc.:
Guess Inc. saw revenues during the three-month period ending May 2 fall to $260 million, down from $536 million during the same time last year.
H&M:
The Swedish retailer, which owns its namesake chain, Cos, & Other Stories, Monki and Weekday, said on June 26 it would be closing 170 stores across the U.S. and Europe. The decision comes after the company saw sales decline 57 percent in local currencies from March 1 to May 6 when many stores in the U.S. and Europe were closed because of the pandemic.
J.C. Penney Co.:
The retailer filed for Chapter 11 bankruptcy protection on May 15 after experiencing steady declines caused by its store closures. Additionally, J.C. Penney is laying off roughly 1,000 employees across corporate, field management and international positions and is closing 152 of its 850 stores permanently. The company also suffered a loss of $546 million in the quarter ending May 2.
The retailer is working toward a going concern sale to continue operating under the J.C. Penney banner, with its intellectual property intact.
J. Crew Group Inc.:
The company, which also owns Madewell, filed for Chapter 11 bankruptcy protection on May 4. J. Crew received a $400 million debtor-in-possession package and aims to have a confirmation plan approved by Sept. 1.
J. Hilburn:
The Dallas-based men’s wear seller filed for Chapter 11 bankruptcy protection on May 5 due to the pandemic. The business saw daily sales decline by 53 percent in March and by 63 percent in April compared to the previous year.
Jeffrey:
Nordstrom said on May 18 it would be permanently closing its three Jeffrey specialty stores and parting ways with its founder, Jeffrey Kalinsky.
John Varvatos:
The fashion label filed for Chapter 11 bankruptcy protection on May 6 due to falling sales and online revenue.
Lion/Hendrix Cayman Ltd. was the highest bidder at a bankruptcy auction on July 22, with a winning bid that’s estimated to be around $97 million. It was reported that John Varvatos himself would leave the company after the acquisition.
Kering:
The luxury French conglomerate, which owns brands like Gucci, Saint Laurent and Bottega Veneta, saw revenues in the three months ending March 31 fall by 15.4 percent to 3.2 billion euros, representing a decline of 16.4 percent in comparable items.
Kohl’s Corp:
Kohl’s Corp recorded net losses of $541 million in the three months ending May 2. Sales dropped 40.6 percent to $2.4 billion.
L Brands:
L Brands, the parent company of Victoria’s Secret and Bath & Body Works, saw net revenues for the three months ending May 2 decrease to $1.65 billion, down from $2.6 billion the previous year.
Victoria’s Secret’s total sales were $821 million, a 46 percent decline from the $1.5 billion earned last year.
Le Tote:
Le Tote, the company that purchased Lord & Taylor for $75 million last year, filed for Chapter 11 bankruptcy protection on Aug. 2. The company has $137.9 million in funded debt obligations.
Levi Strauss & Co.:
The company is cutting 15 percent of its corporate workforce, which totals roughly 700 positions globally. The cuts will generate an annualized savings of $100 million for the company.
Additionally, in the quarter ending on May 24, the company saw net losses equal $363.5 million. Revenues fell 62 percent to $497.5 million.
Long Tall Sally:
The women’s specialty retailer said on June 16 it would be shuttering its doors permanently. The brand estimated its e-commerce site will close by the end of August.
Lucky Brand:
Lucky Brand filed for Chapter 11 bankruptcy protection on July 3.
LVMH Moët Hennessy Louis Vuitton:
The luxury conglomerate saw net profits decline 84 percent in the first half of 2020. The company reported sales fell 38 percent in organic terms in the three months ending June 30 after the pandemic forced the closure of many of its stores worldwide.
Macy’s:
Net sales for the retailer for the quarter ending May 2 fell more than 45 percent to roughly $3 billion from $5.5 billion the prior year. Macy’s also revealed in late June that it is cutting 3,900 corporate and management jobs to save $365 million this year and $630 million in expenses on an annual basis going forward.
Marc Jacobs:
The Marc Jacobs brand laid off roughly 60 employees, including recent high-profile hire Olympia Le-Tan at the beginning of June.
The Modist:
The London and Dubai-based e-tailer — which specialized in modest fashion — has ceased operations.
Moncler:
The fashion brand saw sales drop 18 percent to 310.1 million euros in the three months ending March 31. This is compared to 378.5 million euros in the first quarter of 2019.
Retail revenues dropped 19 percent to 236.3 million euros, compared to 291.4 million euros the year prior. Wholesale revenues also decreased by 15 percent to 73.8 million euros, compared to 87.1 million euros.
Neiman Marcus Group:
The 113-year-old retailer filed for Chapter 11 bankruptcy protection on May 7. Since the filing, the retailer has decided to close four locations including its recently opened 188,000 square-foot store at Hudson Yards, as well as its stores in Bellevue, Wash., Palm Beach, Fla., and Fort Lauderdale, Fla. The retailer is also closing 17 of 22 Last Call outlet stores.
Nike Inc.:
Nike Inc. lost $790 million in sales during the three-month period ending May 31.
Nordstrom is closing 16 of its full-line department stores this year due to the pandemic. Sources told WWD that the locations include stores in Naples, Fla.; Flatiron Crossing, Colo.; Short Pump Town Center in Richmond, Va., and West Farms, Conn.
PVH Corp.:
PVH Corp., the parent company of Tommy Hilfiger and Calvin Klein, posted a net loss of $1.1 billion during the first quarter this year.
The company said on July 14 that it will streamline its North American operations by exiting its 162 outlet store Heritage Retail business and reducing its office workforce by roughly 450 positions, accounting for 12 percent of staff.
Rag & Bone:
The fashion label laid off at least 70 employees across retail and corporate roles.
Ralph Lauren:
Ralph Lauren saw revenues fall 65.9 percent to $487.5 million in the quarter ending on June 27.
Revlon Inc.:
Revlon Inc. saw sales fall 18.1 percent to $453 million, with an estimated COVID-19 hit of $54 million. Net losses widened from $75.1 million to $213.9 million.
RTW Retailwinds Inc.:
The company, which operates New York & Co. and Fashion to Figure, filed for Chapter 11 bankruptcy protection on July 13. It expects to close most of its brick-and-mortar stores and has launched a liquidation process.
Salvatore Ferragamo:
The luxury fashion company reported a 46.6 percent decline in sales to 377 million euros in the first half of the year. This compares to 705 million euros earned during the same period last year. Sales in the second quarter fell by 60.1 percent.
Signet Jewelers:
The jewelry retailer, which is behind Kay Jewelers, Zales, Jared, H. Samuel, Ernest Jones, Peoples Jewellers, Piercing Pagoda, and james.allen.com, is closing roughly 400 stores.
The company also experienced a decline in sales by 40 percent in the three months ending May 2.
Tailored Brands:
Tailored Brands, the parent company of Men’s Wearhouse, Jos. A. Bank, Moores and K&G, filed for Chapter 11 bankruptcy protection on Aug. 2.
Tapestry Inc.:
The conglomerate — which owns Coach, Kate Spade and Stuart Weitzman — reported revenues slipped to $1.07 billion from $1.33 billion last year. The company lost $677 million during the first quarter 2020, compared to $117 million last year.
Coach’s sales fell from $965 million to $772 million, Kate Spade’s sales fell from $281 million to $250 million and Stuart Weitzman fell from $85 million to $51 million from last year.
Tod’s SpA:
The Italian luxury company saw revenues decrease by 30 percent in the first quarter this year, totaling at 152.8 million euros.
True Religion:
The fashion brand filed for Chapter 11 bankruptcy protection on April 13. In June, the company filed a plan to restructure by converting a portion of its $110.5 million pre-petition debt.
Under Armour:
Under Armour reported a loss of $183 million in sales in the second quarter after reporting a loss of $590 million in the previous quarter.
Urban Outfitters Inc.:
The company saw a quarterly net loss of $138 million. In the three months ending April 30, total sales fell 31.9 percent to $588 million, down from $864 million during the same time last year.
VF Corp.:
The company, which operates Vans, The North Face, Dickies and Timberland, posted a loss of $285.6 million in the quarter ending June 27. Revenues fell 47.5 percent to $1.1 billion from $2.1 billion the previous year.
Vince Holding Corp.:
The company reported an operating loss of $21.9 million in the first quarter ending May 2, compared to an operating loss of $6.23 million during the same time last year. Total sales decreased 47.3 percent to $39 million in the first quarter compared to $74 million from last year.
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