BCBG to close stores to focus on e-commerce
BCBG Max Azria is the latest of many companies to have announced restructuring plans to maintain its performance. The company plans to close a number of stores to focus more on e-commerce, licensing, and wholesaling, according to spokesman Seth Lubove of Sitrick & Co.
Lubove told Fortune, “Like so many other great brands, BCBG has been negatively impacted by the growth in online sales and shifts in customer shopping patterns and, as a result, has too large a physical retail footprint.” He added to Bloomberg in an email statement, “In order to remain viable, the company -- like so many others in its industry -- must realign its business to effectively compete in today’s shopping environment.”
Bloomberg reported that BCBG hired AlixPartners LP, replacing Berkeley Research Group, to restructure its debt, and it hopes to stay out of bankruptcy court, where many retailers have found themselves last year and during the holidays.
The 2016 holiday sales season took its toll on many retailers. While some brands and retailers performed well in the season such as Canadian luxury jewelry retailer Birks and UK-based fashion label Ted Baker, other retailers, especially department stores, struggled through the season including Target and H&M that posted soft sales or a decrease for the period.
Payless announced this week that it is restructuring to deal with its $665 million debt, and designer Bibhu Mohapatra filed for Chapter 11 bankruptcy to manage his debts of up to $1 million. Most notably, Macy's cut over 10,000 jobs to start the year as part of numerous store closures and overall downsizing.
BCBG currently operates 570 global stores, with 175 in the US. In 2016, the company opened new stores in Munich and Paris, and announced it would open a retail location at Les Galeries de la Capitale in Quebec in 2017.
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