LONDON — Paul Smith has closed its U.S. press office, which has been operating for more than two decades, and let go three employees as the owners refocus the business in changing times.
Smith confirmed in an exclusive interview Tuesday the U.S. press office has shut, but the U.S. sales office and stores will remain open. Paul Smith has seven standalone stores in the U.S. and sells at Saks Fifth Avenue, Barneys, Bergdorf Goodman and Holt Renfrew in Canada.
“We made the decision and it’s very, very sad, but the world is changing. We’ve never been big, big, big in America — we’ve always been fairly consistent — and we can service the press requests through our London or Paris offices,” he said.
The three members of the press office were Cindy Vieira, Paul Rousseas, and Jami Gunzenhauser.
Smith confirmed that the Milan press office remains open, and that the U.S. closure was not the result of “emergency” measures, but part of an ongoing reassessment of the company as the dynamics of the fashion and luxury — and media — businesses change.
“We’ve been around for (more than) 40 years. It’s about looking at things — and doing things — in a different way. It’s a good time to readjust,” he said.
Smith added that his company is putting a greater emphasis on divisions such as marketing and IT in response to the shape-shifting business. The Paul Smith e-commerce site has become the brand’s biggest store, and e-commerce is based in London.
Press promotion, he said, is now online, via channels such as Facebook, Twitter and Instagram, including @paulsmithdesign and the designer’s personal account, @paul_smith.
Smith said his wholesale customers are no longer independent boutiques, but bigger retailers. “The customers are bigger, but there are fewer of them,” he continued, ticking off names including Selfridges, Harrods, Le Bon Marché and Barneys.
Change has been in the air since last year, with the designer streamlining the mechanics of his business, which saw sales fall in the 12 months to June, 2015. “We’ve been doing well in certain countries,” he said, but terrorism in Europe and the changing nature of fashion have been disruptive. “We’re biding our time,” Smith explained.
In the year to June 30, 2015, the company’s turnover was 191.7 million pounds, or $302.8 million, 8.4 percent below the previous year, according to Companies House, the official register of U.K. businesses. All figures have been converted at average exchange rates for the 12-month period.
Retail sales were down 4.8 percent overall, and 3 percent on a like-for-like basis, reflecting a mixed performance across core markets and the temporary closure of the brand’s Heathrow Terminal 5 store when it re-located.
Wholesale sales were down 11.3 percent year-on-year, with Europe a particular problem, while e-commerce sales climbed 12 percent. The company said it would continue to invest in developing and promoting the site to maintain growth.
Operating profit before exceptional items was down by nearly 42 percent as a result of the decrease in revenue, and increased investment as the company began streamlining its operations.
Last year, Smith named his first creative director as part of a design studio refresh and a bid to spend more time on his creative and brand-related projects. Simon Homes, who had been with the company since 2004, oversees all men’s and women’s ready-to-wear, footwear and accessories collections.
In 2015, the brand also consolidated its various secondary lines and denim collections under the new PS by Paul Smith label, which includes clothing, denim, footwear and accessories for men and women. Smith will show the men’s element of PS by Paul Smith during a special presentation at Pitti Uomo in January.
Smith remains the majority shareholder, with a 70 percent stake in his namesake company, while Itochu, his longtime Japanese licensee, holds the remaining 30 percent.
Smith pointed out that while the dynamics of fashion and media are changing fast, his model is decidedly old-school. “We’re still an independent company, with no borrowing,” he said, adding that the company owns its buildings in New York, Milan and London as well as its two shops on Albemarle Street in Mayfair, London.