Fashionistas everywhere may be familiar with these names in surprising trouble! And really, it’s not clear that they can get out of the hole at this point. Debt year after year has been a bottom-line killer, but why?
Let’s explore the inside scoop about names you’ve seen dominating the mall for decades. Some may reinvent themselves in the future, and some may disappear. Who knows what will happen?
1. Nine West
Nine West has been around since 1973, and several generations of women in your own family may swear by the brand. Or maybe not! It appears that sales have been terrible for years, and the company is currently compromised by $1.5 billion in debt. That’s billion with a B!
Observers have noted that there seems to be a decline in overall interest for classic Nine West products, like ballet flats and heels. Why? A great question. But the reality is that their business relied on stable numbers in that area, and they filed for bankruptcy in 2018. Customers may not know that the brand actually owns Anne Klein, Easy Spirit, and Gloria Vanderbilt as well. In an effort to restructure, they have sold Easy Spirit. And more drastically, they plan to shut down all store locations! One piece of the puzzle might be the simultaneous failure of mega retailer Sears, which was a major location of sales for its shoes. What does the future hold for Nine West? Plans seem to include a shift away from footwear altogether, and a renewed focus on apparel and jewelry through some of the business group’s other companies. The times, they are a changing!
2. Charlotte Russe
Charlotte Russe has always been a cute option for casual wear, but it looks like Forever 21 finally beat it in the marketplace. The chain has filed for bankruptcy, and it plans to close around 500 stores. In addition, merchandise will be liquidated on clearance to recoup at least some of its investment. Now is the time to rush and grab all you can before Charlotte Russe is a line in the fashion history books!
Maybe we knew that Charlotte Russe was not our absolute first choice in the big scheme of things. Who had any idea it was doing so badly, though? Truthfully, malls themselves have been experiencing fewer visitors. Online shopping is probably to blame! It will be interesting to see which fashion brands survive the Armageddon of e-commerce, but it looks like Charlotte Russe has met its bitter end.
We probably all got our ears pierced for the first time at Claire’s. It’s been an absolute rock in our lives! At least as kids and teens — not so much as mature shoppers. But Claire’s really had a good niche, since kids and teens are definitely a market for jewelry and accessories. Where else would they go for these items tailored to their pink fluffy taste? Claire’s didn’t really have many serious competitors in that respect, in our estimation. And they’ve been around since 1961!
So what happened? It looks like the chain became overwhelmed by $2 billion of debt, and a major intervention was needed. Claire’s filed for bankruptcy and promised to get rid of $1.2 billion in court. They also closed 130 stores last year! Their financials are looking better right now, and that would be a good thing if not for their recent dispute with the FDA over asbestos in cosmetics. Yikes! Claire’s challenges the accuracy of the government’s testing process, but this is a PR nightmare they really didn’t need at this moment in time. It will be interesting to see how the case turns out, and whether or not Claire’s can weather the storm in the end. What do you think?
Bebe was always a bit more expensive than some of the other stores at the mall, but it had a following of fashionistas looking for something to wear at the club and on the weekends. Things changed when the creative director left in 2007, and sales dropped. Apparently, she divorced the founder!
Management thought it might be a good idea to get rid of their storefronts, and transitioned into the online space by closing 180 mall locations. In 2017, the company lost $4.6 million. But unlike some of the other stores on our list, Bebe did not file for bankruptcy and does not have the type of inescapable debt that plague many retailers right now. They were able to negotiate with their landlords to get out of their planned obligations, and hope that their online transition will lead to better days ahead. It’s a good question if they will regain the past success they enjoyed in the new online space, but only time will tell.
Payless, you too? Now this is definitely a store we all took for granted. Why would a retailer offering contemporary styles for half the price be doing so badly? It appears they really were not succeeding for awhile, racking up $470 million in debt!
Payless filed for bankruptcy and plans to lay off 16,000 employees! They will close all stores in the U.S. and Canada, which totals around 2,500 locations. The company had already closed 600 storefronts in an effort to get back on their feet, but it looks like they were not able to do so in a reasonable amount of time. Maybe Payless sees that the writing is on the wall in the age of Amazon and wants to cut their losses now. Will this be a trend? The chain is offering a liquidation of its current stock through the end of June, so hop on down to your local shop! See what you can find before it’s all gone forever, RIP.