NEW YORK – In a move to stay ahead of the continually changing shopping preferences of digitally-savvy North American consumers, Tommy Hilfiger has today closed his 22,000-square-foot global flagship at 681 Fifth Avenue, another loss to the famed Manhattan shopping street.
In addition, Hilfiger will close its store on Collins Avenue in Miami on April 28.
It’s been a tough time for Fifth Avenue, with stores ranging from Lord & Taylor to the Gap, Abercrombie & Fitch and Henri Bendel vacating the avenue. Ralph Lauren Corp. got out of a 15-year lease when the brand closed its Polo flagship at 711 Fifth Ave. in 2017, after three years in the location.
Hilfiger opened the four-level Fifth Avenue flagship to much fanfare in 2009, calling it “pinnacle moment” for the brand. The store, designed by Callison Architects and the Hilfiger creative team, was formerly occupied by Fortunoff and was originally designed by McKim, Mead and White.
RELATED: Take a look at the retailers that closed the most stores in 2018:
Retailers that have closed the most stores in 2018
Retailers that have closed the most stores in 2018
Perfumania: 97 Stores
The fragrance retailer store announced its plans to shutter a quarter of its stores in August last year as it filed for Chapter 11 bankruptcy. It even made The Motley Fool’s 2018 Death Watch List. However, Perfumania might be one of the many brands trying to reinvent itself as it opened a prototype store at Denver Premium Outlets in Colorado that aims to help customers find their “personal scent,” according to Chain Store Age.
Orchard Supply: 99 stores
Lowe’s announced its plans to shutter all of its Orchard Supply stores earlier in August 2018. Lowe’s bought Orchard Supply Hardware for $205 million just five years ago, but the closure of the franchise is meant to focus on Lowe’s home improvement business in order to compete with Home Depot. This is part of CEO Marvin Ellison’s strategy to “aggressively rationalize store inventory,” reported CNN.
The Children's Place: 100 Stores
Children’s clothing store The Children’s Place closed more than 170 stores in 2017, and the trend continued in 2018 with an additional 100 stores. Company CEO Jane Elfers has stated that the brick-and-mortar downsizing is part of a broader strategy for the company to move from a mall-based presence to an online marketplace, based on ever-growing consumer demand for digital options and the company’s partnership with Amazon.
Payless Shoesource: 100 Stores
Payless ShoeSource filed for bankruptcy in April 2017 and subsequently closed about 900 of its stores. The move is part of Payless’ “Restructure and Reorganization” strategy. Part of the closures was the result of sputtering mall traffic and competitor strength, but also because the chain was deep in debt. Although closing stores alleviated Payless’ debt obligation, it remains to be seen if the franchise will survive.
Children’s apparel chain Gymboree has closed 102 stores so far in 2018 in an effort to restructure its business and leave Chapter 11 bankruptcy protection, and it seems to have achieved just that. The retailer launched its reboot on Amazon Prime Day in July 2018, reported CNBC. Its re-emergence includes an overhaul on both clothes design and digital presence and includes a new app. “It’s really an all-new Gymboree, different in almost every single way,” said Gymboree Group chief executive Daniel Griesemer in an interview with CNBC.
Charming Charlie, a retail chain that specializes in jewelry and accessories, filed for bankruptcy in December 2017. But it must’ve really turned the charm on to its business plan, because the chain successfully re-emerged from bankruptcy in April 2018. Although the store’s restructuring required it to close down more than 100 stores — more than a quarter of its physical locations — hopefully the lack of debt will help the company regain a foothold in the world of trinkets.
Ascena Retail: 108 Stores
Retail conglomerate Ascena Retail Group — which owns Ann Taylor, Dress Barn, Loft and Lane Bryant, among other brands — has closed more than 100 stores so far in 2018, but unlike other stores listed here, the closures do not appear to be giving the group any leverage. With hundreds of more closures planned and a trend of declining revenue since 2016, Ascena seems poised for permanent closure.
Signet Jewelers: 120 Stores
Signet Jewelers has lost some of its luster in recent years, with declining revenues and a drop in profit between 2017 and 2018. The company is planning for more than 200 store closures by the end of the fiscal year 2019 as part of its “transformation” plan, with an expectation that 30 percent of revenue from the closed stores will transfer to the remaining Signet stores. Part of that transformation includes a focus on diversity, according to CEO Virginia Drosos. “Diverse teams make better decisions” she said in an interview with Yahoo Finance. “They see each other’s blind spots.”
Sears Holding Company is the parent company of both Sears and Kmart, and right now it’s probably not too proud of its kids. Sears filed for bankruptcy in October 2018, preceding CEO Eddie Lampert stepping down from his position. Meanwhile, the inside of Kmart stores are looking barren themselves. Both stores face the same issues most retailers have nowadays: larger demand for e-commerce, declining mall traffic and a higher demand for off-price products, according to Business Insider. This has translated into more than 100 store closures for both brands.
The Bon Ton: 250 Stores
Earlier in the year, Bon Ton was ready to say bon voyage to its business of over 100 years, a victim of “the retail apocalypse,” according to CNN. However, it looks like the store is set up for a rebound thanks to a new owner. “A subsidiary of the tech company CSC Generation Holdings told USA Today that it has signed a deal giving it the rights to Bon Ton and its subsidiary department store chains,” according to CNBC. The new Bon Ton will focus on online shopping, and on the physical side of things, will emphasize a personal styling angle for its customers.
With 1,000 store closings in 2017 and an additional 250 so far in 2018, RadioShack is a greatly diminished presence from its once-dominant perch atop the heap of electronics industry retailers. Although the company once boasted a store within 3 miles of over 95 percent of American households, RadioShack has been battered by consumers’ increasing preference for online electronics shopping.
Best Buy: 257 Stores
Best Buy shuttered more than 250 stores in 2018, including all of its small-format mobile stores. “We had opened them about 12 years ago, at a time when the penetration of smartphones was very low, so this was a great growth opportunity,” CEO Hubert Joly told Business Insider. “Fast forward to 2018, smartphone penetration is a very mature industry.” Best Buy doesn’t appear to be in as dire straits as some other companies in this list. Although it didn’t churn out as much profit as it did last year, the company gained on 2017’s revenue by $2 billion. On the other hand, its stock value has fluctuated for most of the year.
Mattress Firm: 274 Stores
Mattress Firm’s business model was unfortunately not as firm as its mattresses. The sleep-focused retailer filed for Chapter 11 bankruptcy in October 2018, with a plan to close 700 of its stores. With more than 3,000 stores, it is the largest specialty mattress retailer in the U.S. According to company CEO Steve Stagner, the closures will bolster Mattress Firm’s balance sheet while optimizing its portfolio.
Toys R Us: 527 Stores
Toys R Us filed for bankruptcy in late 2017, which preceded its liquidation sales in March 2018. Besides the jobs lost to the toy store itself, this also resulted in toy manufacturers laying off some of their staff. Hasbro announced it would cut its employee force by 10 percent following Toys R Us’ closure.
Rite Aid: 1,871 Stores
Walgreens purchased Rite Aid in early 2018, and in March 2018, Rite Aid announced 1,932 stores were officially transferred to Walgreens. The transaction was valued at more than $4 billion.
The store was designed with Hilfiger’s traditional American iconography and presented in new and unexpected ways. At the opening, for example, the décor featured a blue Cadillac fender and a blue surf board, red Marshall amp, a white vintage Sixties television monitor and an old ice skate. A black patent leather sofa sat on an overdyed Persian run, and vintage clothing was interspersed with runway pieces. Rough hewn material such as unfinished wood tables contrasted with elegant Venini chandeliers. A curved floating staircase with a glass railing and flourescent-lighted steps also doubled as a viewing platform for revolving art exhibits.
The Fifth Avenue flagship and the 9,000-square-foot Miami store were the only two full-price Hilfiger stores in North America. The company has over 200 outlets.
“In line with our strategic objective to further reach and engage with digitally-savvy North American consumers, we will focus on next generation retail experiences and partnerships to stay ahead of today’s continuously changing shopping habits and preferences,” said Daniel Grieder, chief executive officer of Tommy Hilfiger Global and PVH Europe.
“This means we are reshaping our retail landscape in North America, closing the New York City Fifth Avenue Tommy Hilfiger store and the Tommy Hilfiger store on Collins Avenue in Miami, Fla. Leveraging our store-of-the-future concepts rolled out in the global retail landscape, going forward North America will be the lighthouse region to develop and test new modular, digitally-infused retail concepts.
“We continue to invest in tommy.com and the ongoing expansion of strong wholesale distribution partners that keep consumers at the heart of our brand,” he added.
Sources said the new modular concepts will manifest themselves as pop-up stores, which have been successful for the brand.
Some 77 associates will be impacted by the Fifth Avenue closing. The company said they will have the opportunity to interview at metro-area company stores and relocate. Some 12 associates will be affected by the Miami closing.
This month, the New York flagship sponsored a three-week pop-up event to acknowledge the TommyXZendaya spring 2019 collection. It featured custom activations and interactive experiences for consumers, tying in with the collection’s Seventies theme and power of the zodiac. Among the activations were arcade game stations, a custom photo booth and Snapchat filter, and in-person fortune readings with Tarot guides.
Hilfiger declined to reveal details about the Fifth Avenue lease and cost savings involved. The lease terms will be disclosed when PVH releases its quarterly figures on Wednesday.
Despite the store closings, Hilfiger’s business continues to be on a strong trajectory. For the third quarter, Hilfiger remained PVH’s key strength as the brand continued a robust performance. In the third quarter of fiscal 2018, Hilfiger’s revenues rose 11 percent to $1.1 billion. International revenues were up 16 percent, and the brand showed strength across all regions, product lines and channels of distribution. In addition, Hilfiger’s North American business experienced 3 percent revenue growth.
For the current fiscal year, Hilfiger’s revenues are anticipated to increase about 10 percent.
The company has witnessed strong growth due to its collaborations, initially with Gigi Hadid, and more recently with Zendaya. Its “See Now Buy Now” global fashion shows – held in cities such as New York, Los Angeles, Milan, and Paris – have brought the brand tremendous momentum and changed the way the company interfaces with its consumer. These shows have garnered billions of social media impressions, increased traffic to the brand’s web site and resulted in double-digit sales growth.
Brick-and-mortar continues to go through rough times. In recent months, several big brands have revealed plans to shutter scores of brick-and-mortar stores. As reported earlier this month, Abercrombie & Fitch said it would close up to 40 stores this year, while also opening that many or more new locations. The Gap plans to shutter 230 Gap stores, Victoria’s Secret is closing 52 doors, and J.C. Penney will close 28 locations. Chico’s FAS Inc. plan to close 100 Chico’s, 90 White House Black Market and 60 Soma stores over the next three years.
When Hilfiger originally opened the Fifth Avenue flagship, between 49th and 50th Streets, the company said it wasn’t looking for that particular location (it was looking at lower Fifth Avenue) and this particular size. But as the brand reorganization progressed, the company became more courageous and gained more confidence to be in a prime Fifth Avenue location. The store was intended to be a real anchor presence for the brand, and was signed with the intention of being for the “long run.” Back in 2009, it was estimated that the flagship would do $1,000 a square foot in sales, or about $22 million a year.
As reported, Calvin Klein, another PVH brand, will close its 18,000-square-foot, three-level flagship store Madison Avenue this spring.