Jones New York announced Thursday it will close all 127 retail stores in 2015, including 36 in Canada, adding to a growing list of retailers shuttering operations.
In addition to closing the stores, Jones New York is pulling the plug on the wholesale business, meaning it will no longer sell the brand in department stores including Hudson’s Bay.
Andrew Hede, interim chief executive officer of Jones New York, said in a statement that the decision was made following a thorough, strategic review of the brand’s recent performance and outlook.
“We recognize that the Jones New York brand is important to many loyal customers, and we are pursuing strategic alternatives for the brand. We will work with our wholesale customers and vendors to ensure an orderly transition over the course of this year,” he said.
A spokesman said possible options include selling the brand, licensing it or developing a new business model, not based on selling apparel through department stores or retail outlets.
The Jones Group Inc. was taken private after it was purchased by Sycamore Partners for $1.2-billion. The deal was announced in 2013 and closed in 2014.
“I found it surprising,” said Maureen Atkinson, senior partner at J.C. Williams Group, International Retail Advisors.
“I thought they were holding up reasonably well, but these investment companies have very clear guidelines for what they are going to accept in terms of performance, clearly they weren’t performing to their satisfaction, so they will look for other ways to make money on the brand. There are other ways to make money, particularly with a brand like Jones New York – they already license their name for things they don’t produce, like costume jewellery.”
Target Canada is also in the process of closing all 133 stores in Canada, putting 17,600 people out of work. Mexx is liquidating 95 stores across Canada after the brand, headquartered in Amsterdam, filed for bankruptcy.
Sony Corp. is closing all 14 of its stand-alone locations in Canada.
Bowring and Bombay & Co. filed for creditor protection last summer, closing 40 stores. In 2014, Jacob Inc. announced it would close all 92 stores in Canada and Reitmans Canada Ltd. pulled the plug on its Smart Set chain, converting 76 stores to other brands and closing 31, it has been reported.
Atkinson said the succession of retail closures are not an indication that the sector is falling apart.
“This is the time of year when all this happens,” she said.
“I think it’s just a matter of people having less patience with underperformance.”
Sycamore Partners is a private equity firm based in New York.
None of the other business units that were acquired as part of The Jones Group Inc. transaction are affected by the actions announced today by Jones New York, according to the press release. Some of those other brands include Nine West, Anne Klein, Jessica Simpson, Easy Spirit and Gloria Vanderbilt.
Sycamore would not reveal how many jobs would be lost as a result of the shut down.
Twenty of the Jones New York outlets in Canada are in Ontario. They are each staffed by approximately 7-12 people, depending on the size of the stores, according to a store manager, who declined to give her name.