CHARIVARI FILES CH. 11; AVANT-GARDE PIONEER CITES EXPANSION WOES
Byline: David Moin / With contributions from Thomas J. Ryan
NEW YORK — Charivari, one of the first American stores to sell avant-garde European designers to New Yorkers, has filed for Chapter 11 bankruptcy.
The retailer has been on a downward spiral for three years due to overexpansion and increased competition from department stores and large specialty chains. And, whether in search of exclusives or a hipper edge, many big stores have been more aggressively pursuing the up-and-coming designers, effectively diluting Charivari’s impact, resulting in sales erosion and, eventually, late payments.
Charivari filed for Chapter 11 last Wednesday in Manhattan Bankruptcy Court.
In the Eighties, Charivari was on a growth track. The 30-year-old Manhattan specialty operation, founded by Selma Weiser and run by her family, peaked at six New York stores with a volume of $20 million, had two licensed stores in Japan and was contemplating moves into new markets, such as California.
Since the early Nineties, however, the company has closed units at 79th and Amsterdam Avenue, Columbus Avenue and 81st Street, Broadway and 84th Street, and its unit at 72nd Street and Columbus Avenue. The two Japan stores closed in 1993.
Charivari even sought more fertile ground on the East Side, but its Madison and 78th Street shop also closed this year, after just three years in business.
Only Charivari’s 8,000-square-foot flagship at 16 West 57th Street remains. Reportedly, that unit has carried the business for several years, generating enough healthy cash flow to support the other, fledgling stores. The store reportedly posts about $6 million in sales and as much as $500,000 in cash flow.
The Weisers could not be reached for comment Monday, but one Charivari insider told WWD: “They were trying to merchandise imported designer fashion in an area where there wasn’t enough of a customer base to support that many stores.”
Said another source: “It was on the financial side, not the merchandising, where they collapsed.”
Several years ago, Selma Weiser had a stroke, reducing her involvement in the business and leaving more decisions to her children, Barbara and Jon. The two are said to be less financially oriented than their mother and reportedly do not work closely together.
After the 72nd Street unit closed in March, Barbara Weiser, executive vice president in charge of Charivari’s women’s business and the daughter of Selma Weiser, said customers on the Upper West Side still want distinctive things, but priced much lower than the store could offer from its suppliers. “It makes our role rather difficult,” she said.
A deeper explanation of Charivari’s problems is evident in an affidavit, filed by Jon Weiser, president of Charivari since 1979, explaining that the Chapter 11 was prompted by an involuntary Chapter 7 liquidation petition in late August by creditors demanding overdue payments. He noted in the affidavit that the chain “had been experiencing financial difficulties from 1995 to 1997 due to the overexpansion of its business that forced it to close two of its three stores in order to stabilize its business.”
He said the company is “unable to meet its current maturing obligations, but expects to restructure its finances and reorganize its business immediately.” He added that the firm aims to restore the company to profitability.
The involuntary Chapter 7 petition was filed by three Italian apparel firms: Erebus SpA, owed $109,527 according to the bankruptcy petition; Nuovo Pellari, owed $102,133, and Idee & Sviluppi di Tinello Adriana, owed $77,019.
The involuntary petition, which was converted to a Chapter 11 petition last week, was filed on behalf of the creditors by Angelo Della Cruce, an agent for apparel firms based in Italy.
Other trade creditors included Issey Miyake USA Corp., $74,851; Maglificio Sangalli Gianni, $43,741; Max Mara USA, $41,649; Jean Paul Gaultier, IFT International Inc., $39,310; Irie, Paris, $33,478; The Donna Karan Co., $35,000, and Zamasport USA Inc., $31,198.
Total liabilities were listed at $6.3 million as of July 26, of which $4.3 million was accounts payable. Assets were $1.3 million.
For about a decade and a half, Charivari was a leader in discovering talent, particularly in Belgium, where it was the first store to buy Ann Demeulemeester and among the first to buy Dries Van Noten.
Charivari was also among the first to carry Helmut Lang, Jean Paul Gaultier, Irie, Matsuda and Yohji Yamamoto. The Weisers were also bent on selling smaller lines such as Betsey Johnson and even stuck with Johnson when she opened her own boutiques and widened her department store distribution. In Austria, the Weisers discovered a bridge-priced knit line called Drogo & Horvath, and the store has carried such offbeat lines such as Chrome Hearts, a California resource known for selling flashy motorcycle jackets with plenty of hardware.
With the smaller knitters they generally bought in England and Italy, the Weisers were known to scrupulously examine each sweater in detail. Almost always, they picked the best.
They rarely tapped Seventh Avenue, though the Weisers would attend a handful of ready-to-wear shows here each season. And in the late Eighties, Charivari started producing its own collection, called Sans Tambours Ni Trompettes, for its stores and for sale to other retailers.
Moreover, the Weisers showed great respect for their suppliers, regularly throwing parties to introduce collections when they arrived at their stores.
“There wasn’t a store around that had as strong a point of view,” said Jill Bredel, who owns and operates a showroom here at 137 Fifth Avenue and is an agent for designers. Bredel has sold several lines to Charivari, including Harriet Selwyn. “It was really one of the best stores in New York because Barbara and Selma were the first to bring new collections to the U.S. and to take risks with smaller designers. They really developed and maintained very strong loyal relationships with these vendors.
“I felt a real personal connection and responsibility to them.”
Bredel recalled that when Selwyn did matte jersey 12 years ago, Selma Weiser was the first one to buy it: “It’s only caught on in the last three years. Charivari was cutting edge before the term became so common.”
Charivari often has been compared to Henri Bendel, when it was on 57th Street and run by Geraldine Stutz, who also had a reputation for bringing fashion-forward collections from abroad to the U.S. However, a big difference, according to Bredel, was that “Selma devoted the whole store to a pure attitude and strong point of view,” while Bendel’s was known for its eclecticism and diversity of shops.
But Charivari’s singular image has been nearly impossible to maintain, especially as department stores have moved the more avant-garde collections into the mainstream.
In an interview last May, Barbara Weiser lamented a dulling of fashion’s edge. “I bought Ann Demeulemeester’s first collection, was one of the first to buy Dries Van Noten, and I looked at Alexander McQueen for many years before I felt there was serious clothing I could buy.”
Now, she said, “I notice the department stores trying to buy these collections. Bigger stores realized they had to be accessible to a new customer. Whether they understand those collections, know how to merchandise them or have that customer, there is much more interest from stores that used to shun those collections.
“We have always been interested in presenting the collection as the inspiration from the designer,” she continued. “We try to distinguish one collection from another and try to get at the essence, whereas some stores try to superimpose their point of view on the collections themselves.
“Lo and behold, many of these designer names seem to look like private label. They look watered down. I wonder whether [other retailers] take out the energy from the collections. People complain that stores seem to feel the same. I’m surprised when I see certain collections represented in some stores, and they look so basic I can’t imagine what this was about.”