Beginning with the back-to-school season, the 441-unit specialty store will eliminate all men’s merchandise and reinvent itself as a retailer of women’s apparel and accessories only. While details about the new merchandising alignment haven’t been released, analysts and retail observers expect the chain to focus on juniors.
Gadzooks chief executive Jerry Szczepanski said Thursday, "This was not a decision we made based on current trend," but one designed to reverse "eroding comps and earnings" and to position the chain to be a "competitive force for the next 10 years."
Szczepanski co-founded the firm in 1983 and built it into a 441-unit chain with stores in 41 states. "But the strategy that worked 20 years ago is a tired strategy," he admitted.
The stores will be closed for several days prior to b-t-s to remove the remaining men’s merchandise and will reopen as exclusively women’s stores, sporting a new concept being developed by FRCH Design Worldwide and The Richards Group.
Gadzooks, which lost $856,000 on a same-store sales decline of 5.1 percent during the third quarter ended Nov. 2, saw comparable-store sales decline 1.2 percent in November and 2.4 percent in December. Last year, net sales rose 8.8 percent to $313.8 million. Women’s merchandise accounts for 55 percent of total sales.
The transition will lead to a 20 percent reduction in sales and a loss of 50 cents a share in the third quarter, according to chief financial officer James Motley, but the chain expects a small profit on a mid-teen sales drop for the final quarter of fiscal 2003.
Richard Jaffe, analyst with UBS Warburg, called the move "clearly a desperate effort, but they had to figure out some way to compete, and women’s is the business that has been performing the best for them."
Gadzooks stock closed down 65 cents, or 13 percent, at $4.34 in Nasdaq trading Thursday.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty