The Manhattan design office of Sears Holdings Corp., the center for developing much of the retailer’s private-label apparel and accessories, will shut down on Friday, affecting 142 people, Sears said Thursday.

The design office, located on 75 Varick Street in the SoHo section of lower Manhattan, has been operating for 10 years and was set up in an attempt to gain better margins and recruit more talent, bridge the gap between its hard and soft goods and encourage cross-shopping. It was where some proprietary brands such as Apostrophe and Covington were developed.

An earlier report by WWD gave an incorrect date on the closing and overstated the number of workers affected.

Sears and Kmart apparel design teams were integrated at the office. Sears and Kmart have also been closing stores, and this year revealed 78 closures, including 68 Kmarts and 10 Sears units.

The move by Edward S. Lampert, chairman of Sears Holdings Corp., to set up the design office served to deflect critics who have believed that he was only interested in selling off the assets of the company, and that the company couldn’t revive its merchandising.

The Varick Street office attracted designers, CAD operators, graphics personnel and others involved in apparel, accessories, shoes and intimate apparel for Sears Holdings Corp. The facility had 45,000 square feet.

In a statement provided Thursday, Sears said, “As we referenced during our fourth-quarter 2015 financial announcement, the company intends to continue to evaluate and optimize our cost structure, including our overall staffing level. We are also highly focused on evolving the company’s apparel strategy, and we look to improve our operations and processes in order to maximize our resources and the profitability of the business. To that end, in late April, we notified associates that we are consolidating our apparel operations and will be leaving our offices on Varick Street in New York City, where we had 142 associates. The offices will close on Friday, July 15. Our apparel and design business units will be primarily based out of our San Francisco offices moving forward. This reorganization will result in roughly 120 positions being eliminated. About a dozen positions are being transferred to San Francisco or Hoffman Estates offices with relocation assistance for the impacted associates and about 10 associates will remain in New York to work from a different office. These decisions are never taken lightly, but they are a necessary part of our efforts to transform the company and return it to profitability. We are committed to treating these associates with compassion and respect during this difficult process. Eligible associates will receive severance and transitional assistance.”

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