Last week, the NY Times reported that Henri Bendel – a self-described “Girls’ Playground for trendsetting young women from around the world” – would stop selling clothes this summer, and would focus instead on accessories and beauty products.
Per the NY Times story (emphasis FT Alphaville’s):
Several employees briefed on the plans said on Thursday that they were told that Bendel had decided to eliminate the fashion departments because there was no sign of a turnaround in the sale of high-ticket items, but that beauty and gift products were selling well and typically with much higher margins. About 8 percent of the employees will be laid off, including sales clerks and executives in its buying office, these people said. About 250 people work at Bendel.
Luxury stores like Neiman Marcus, Saks Fifth Avenue and Barneys New York have all eliminated hundreds of jobs and scaled back their orders from designers in reaction to the economy. Sales of $1,000 dresses and cashmere sweaters began to plummet last October.
Henri Bendel, a purveyor of Gossip Girl chic (see image below) is owned by Limited Brands, which counts Victoria’s Secret and Bath & Bodyworks among its portfolio of companies.
But it’s not just size-zero socialites with a penchant for $1000 jersey dresses who have cut back on their spending. On Monday, Filene’s Basement – which flogs designer clothes, accessories and bridal wear at bargain basement prices – filed for Chapter 11 bankruptcy protection.
The WSJ reports (our emphasis):
Filene’s Basement Inc…filed for Chapter 11 bankruptcy protection Monday with a deal in hand to sell 17 of its 25 stores for $22 million.
Filene’s is seeking to sell the stores — including its flagship Boston location — to Crown Acquisitions, a commercial real estate firm based in New York.
Filene’s said Crown still intends to operate the stores under the Filene’s name while continuing to sell designer goods at bargain prices.
Filene’s has been struggling amid an “increasingly competitive discount retail market,” the company said in court papers, pointing out such rivals as Loehman’s, TJ Maxx and Century 21, as well as traditional department store chains like Macy’s.
The retailer said recently opened stores, including locations in the suburbs rather than the traditional city locations, haven’t performed well. And amid a recession that caused consumers to slash their spending, Filene’s said its liquidity has become constrained.
Related links:
Oxford Street: the crossroad to hell – Tyler Brulé / FT
Brutal holiday sales hit US stores – FT