New York & Company Inc. is ready to elevate the profile of its online subscription-box service, called NY&C Closet.
“We see NY&C Closet as a test for an indefinite period of time, but we are looking at ways to expand it and raise the overall awareness,” Robert Ferrario, New York & Co.’s vice president of strategy and growth initiatives, told WWD.
In an interview at New York & Co.’s headquarters on West 34th Street in Manhattan, Ferrario portrayed the specialty retailer as getting increasingly innovative and moving forward on different channels for growth. As Ferrario observed, women’s specialty retailers, lifted by the rising tide in retail sales in 2017, are coming off of one of their best holiday seasons in years, encouraging them to step out with strategies to offset volume declines from store closings.
The publicly listed company, which is 49 percent owned by Irving Place Capital, shuttered more than 150 locations since 2012, bringing it to 450 locations, while expanding its digital business to represent 30 percent of volume. New York & Co. also has 125 outlets. “As you close stores, it forces you to work harder on other delivery models,” Ferrario said, adding that NY&C Closet was quietly launched in July.
NY&C Closet blends the subscription box and rental models in retailing, taking cues from such businesses as Netflix, Rent the Runway and Stitch Fix. Others operating in the subscription-box format, which is fast growing, are Nordstrom’s Trunk Club, Gwynnie Bee and Old Navy’s Superbox.
With NY&C, for $49 a month, you can rent up to three New York & Co. garments at any time with an option to buy any of the items. Once a customer has built their virtual closet, they can prioritize items in their queue and wear and return as often as they’d like, always receiving up to three garments in the next box. They receive the next box after the three garments are returned or purchased. Shipping and returns are free and clothes are dry-cleaned.
The NY&C Closet (nyandcompanycloset.com) taps New York & Co.’s assortment, including the exclusive five-year-old Eva Mendes collection. The emphasis is on wear-to-work and casual fashion covering all occasions, and affordable prices, with sweater dresses, pants and tops mostly priced between $50 and $100; casual T-shirts and sweatshirts are priced less.
According to Ferrario, the web sites have been kept separate to avoid confusion among customers. There’s also been time to work out any kinks before opening up the NY&C Closet to a broader audience via nyandcompany.com.
He said the test has been small, but with a national sample large enough for reliable results. He declined to divulge any statistics on how many people subscribe to NY&C Closet, or its revenues at this early juncture.
Among other growth maneuvers last year, New York & Co. purchased the Fashion to Figure eight-unit retail chain for plus sizes, which was launched in 2004 by the great-grandsons of Lena Bryant, founder of Lane Bryant; a collaboration with actress Gabrielle Union emphasizing fashion-forward looks was introduced, and the Eva Mendes collection extended its offering and size range.
For the third quarter, New York & Co.’s net sales increased 0.1 percent to $214.2 million; comparable-store sales rose 2.2 percent. For the fourth quarter the retailer has guided the market to a low, single-digit percent total sales gain, and a low, single-digit comparable-store gain. Gross margins are expected to be up. For the trailing 12 months, sales are listed at $915 million.
The positive outlook is based on recent trends, and preliminary findings at NY&C Closet is adding some optimism. “We are entering a new phase with NY&C Closet,” said Ferrario. “We’ve been pleasantly surprised by the results. People are less hesitant about the idea of renting clothes” that go from body to body.
He also feels that renting clothes is a good way for people to try out styles or labels new to them, without going to the expense of buying them, Ferrario added.
With NY&C Closet, “We’re still learning and still understanding,” he said. “But we have never gotten complaints that the clothes feel worn or used.”