WASHINGTON — Merry-Go-Round Enterprises Inc. is likely to close between 100 and 200 stores over the next year — more than the 80 stores the company had announced earlier as part of its reorganization in Chapter 11.
Boogie Weinglass, the chain’s ponytailed co-founder who reemerged from semi-retirement in September to take over Merry-Go-Round’s merchandising, noted that while the additional store closings are under consideration, a final number has not yet been determined.
As part of its sweeping changes to reverse its fortune, Merry-Go-Round, the young fashion retailer that filed for Chapter 11 early in January, expects to find a new head merchant in about three months and plans to open a buying office in Manhattan within a few weeks, according to Weinglass.
“We are aggressively looking for someone to work with me,” said Weinglass, though he declined to discuss candidates. He also emphasized that officials at the company, which operates 1,450 stores under such names as Merry-Go-Round and Cignal, have changed its merchandising strategy to emphasize more conservative fashion, which is expected to be noticeable in the stores by spring.
Weinglass, 53, replaced Stuart Lucas, a 20-year veteran, and also took over the title of chief executive officer, replacing Michael D. Sullivan, who remains as company president.
“We definitely lost our focus and got away from the basics of retailing over the last nine months, but we are going to bring it back,” Weinglass said, adding that he’s streamlining inventory and is making sure the stores’ merchandise is tailored to their areas.
“We are going to stick by our budgets and we’re going into regional buying,” he said.
Weinglass admitted to poor buying decisions in the past, including staying too long on hip-hop and taking heavy gambles on wide-leg jeans and outerwear, like $400 poodle-trim leather jackets, but he said all that will change. He added that a buying office expected to open in the New York fashion district in a few weeks will give the retailer easy access to young vendors. “We are going to open our doors to anybody who wants to see us,” he said.
He noted, however, that he doesn’t understand why some vendors are still skittish about selling to the retailer.
“We are financially secure,” he said, pointing out that the company has $100 million in cash and has lined up a $125 million debtor-in-possession package from CIT Group.
As part of its reversal strategy, the company is going forward in stepping up women’s clothing to about half of the inventory at the Merry-Go-Round division. Currently the category accounts for about 35 percent. Longer range plans include increasing that category to 65 percent.
While Weinglass acknowledged some of the retailer’s poor merchandising decisions, he also took the opportunity to point out that Merry-Go-Round has been a victim of overreaction from the financial community.
“We had a great track record, but we ran into a snag in the past year,” he said. “Our problems were magnified with too much inventory. We took a huge writedown and the banks panicked and our factors panicked. It wasn’t our strategy to file Chapter 11. We were forced to, but the good news is that we are making positive strategic changes.”