DALLAS — After 40 years in business, designer specialty store Lilly Dodson here will close by the end of October.

But Bill Dodson, owner and son of the store’s eponymous founder, is not getting out of retail: he will become director of sales for women’s merchandise at Stanley Korshak at the end of the month.

“It’s sad, and it isn’t,” Bill Dodson said. “It’s been a long time, and we’ve had a lot of great memories and done some phenomenal things here over the years. It’s time to move on. The passion just hasn’t been there for a while.”

Dodson explained that about a year ago he signed a complex asset purchase agreement that fell through with Jacques Sellam, who operated the now-defunct Daniel Foxx boutique in Palm Desert, Calif. Lilly Dodson found itself short of funds and unable to purchase fall merchandise this season.

“When the partnership didn’t work out, the decision to do this became a little bit easier,” Dodson said. “[Korshak owner] Crawford Brock has a terrific operation over there, and I’m looking forward to being a part of it. We’ve been friends for a long, long time.”

Dodson, who joined his mother’s store in 1970, is best known for his prosperous relationship with Escada. He was one of the first American retailers to buy the German sportswear brand in 1982 and opened the first Escada boutique in the U.S. in 1985.

Dodson developed a strong following for Escada among local socialites, including Gene Jones, the wife of Dallas Cowboys owner Jerry Jones. He built a huge trunk show business with flamboyant runway productions that titillated audiences with animals and props, including a tiger and a motorcycle. They hit an apex in the mid-Nineties, when one fall trunk show chalked up nearly $3 million,

Lilly Dodson opened in 1963 as a high-end specialty store in Oak Cliff, a neighborhood south of Dallas. In 1973 it moved to two locations at Valley View Center in Dallas and the Promenade shopping center in North Dallas. The Promenade location grew to 30,000 square feet and was the site of the first Escada shop, while the Valley View store closed around 1982.Dodson opened Lilly Dodson and a separate but adjoined Escada shop in the Highland Park Village luxury shopping center in 1990 and subsequently closed the Promenade store. Dodson and Escada had an unusual layout: they flanked a movie theater but were linked behind the theater, so shoppers could easily move between both spaces.

At the time, Dallas had a number of designer specialty stores and competition was intense, so in 1993 Dodson added a new dimension to Lilly Dodson by contracting Michael Faircloth to serve as in-house couturier. From his studio in the basement, Faircloth created custom suits, dresses and gowns for wealthy, high-profile women.

First Lady Laura Bush became his client shortly before her husband was elected governor of Texas. She continued to patronize the designer, and when George W. Bush was sworn in as president, Laura Bush attended the inaugural ball in a red beaded lace gown by Michael Faircloth. Shortly after that, the designer, who needed more space to pursue a wholesale business, moved out of Lilly Dodson.

In 1998, Escada’s retail division bought the rights to its store from Dodson. The stores swapped spaces, and Escada did a thorough facelift to freshen the shop. The stores remained connected at the rear, however, and Dodson continued as a management consultant.

With Dodson’s departure, Escada plans to close the link between the two stores.

“Lilly Dodson put Escada on the map in Dallas and assisted greatly with our success in that market,” wrote Larry DeParis, president and chief operating officer of Escada USA, in an e-mail from Munich. “We are proud of the many successful trunk shows and fashion shows that we hosted with Bill over the years.Bill and Lilly Dodson were key in the positioning of Escada as a fashion powerhouse in Dallas.”

The Dodson space will “definitely” be leased to another high-end clothing store, according to Henry S. Miller 3rd, who operates the center. He is negotiating with international designers as well as a local retailer that he declined to name, but that a knowledgeable source said is Del-Ann’s.

At its peak in the mid-Nineties, Lilly Dodson did about $10 million in annual sales of clothing, shoes and handbags, Dodson said. In the past several years, Dodson also introduced a small component of contemporary collections, like Vivienne Tam.While acknowledging that the economy contributed to his decision to close, Dodson pointed out, “There are a lot of stores that are thriving right now, and I think you have to take on a new approach. Buying habits have changed. Customers are looking more for value regardless of their income bracket.”

He was enthusiastic about bringing his experience and contacts to Korshak: “This is a golden opportunity. I have lot of wonderful customers I enjoy and great relationships, and I hope they’ll follow me and I can keep the same spirit and passion going that we had here in Lilly Dodson for so long. I got that feeling at Stanley Korshak.”

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