Steven Alan is the latest designer brand to feel the sting of the less-than-robust retail environment.
The New York-based company is in the midst of substantially downsizing its business, closing the majority of stores, exiting wholesale and letting go of a large percentage of staff.
Reached at his office Wednesday morning, Alan said, “We’re definitely shrinking the company, but we haven’t made a decision to close down. We’ve closed stores and we will close more, but we hope to go on.”
At its peak, Steven Alan had operated 23 stores across the U.S., a robust wholesale operation, and employed in excess of 185 people. The company has now trimmed its store based to six and headcount at both the corporate office and the retail units is down to approximately 20. The showrooms in both New York and Los Angeles have also been closed and the company’s optical license has been terminated.
“We’re in downsizing mode,” Alan said. On Wednesday morning, he informed his staff about the dire situation and told them that he couldn’t guarantee their jobs would continue.
In April of 2015, Alan had hired Financo, the investment banking firm, to find a backer, but that never happened, he said.
“It’s been a very rough two years,” he said. “But we’re trying to work through it.”
He said that the Steven Alan stores carried only 25 percent of the company’s own brand, which was a problem, and while the stores in New York, Los Angeles and San Francisco were holding their own, the others were struggling in the malaise of the “macro retail environment,” he said.
In addition, the company’s e-commerce site, which was a key focus for the brand, had severe technical issues. “We incurred huge expenses trying to fix it,” he said. “And of course we couldn’t sell any of the inventory from the stores on the site, which resulted in major markdowns. So we were really stuck.”
Right now, the stores that remain open are in TriBeCa, Chelsea, Brooklyn, a small outpost on the Upper West Side, Boston and Atlanta.
Additionally, Alan said the brand has exited the wholesale market and is producing key items for his own remaining stores at factories in New York every six weeks. “They will feed our stores,” he said.
But Alan is a realist and knows he made “some bad decisions” over the years and as a result, it will be tough to “get back on track.” But he hopes he’ll be able to right the ship. “Hopefully we can survive.”
Steven Alan was founded in New York in 1994 and produced both men’s and women’s wear in addition to operating its own multibrand retail stores.