The Los Angeles-based luxury brand, known best for eccentric biker-themed jewelry and accessories favored by a long list of major celebrities, has permanently laid off 100 employees in the U.S., WWD has learned. The layoffs are thought to affect the majority of its retail employees in America.
Sources recently noted that the ongoing closures of all “nonessential” retail stores in North America and Europe, where the company has nine and four stores, respectively, were undoubtedly affecting the brand financially — it has no online business to speak of. Chrome Hearts last week filed a required notice with the State of California disclosing the layoffs and categorizing them as “permanent.” Nearly all other companies that have filed worker layoff notices, including a number of retailers, have categorized them as “temporary.”
A spokeswoman for the company said the brand does plan to reopen the stores, but, as with other businesses, it is unclear when exactly that will happen.
“While the retail landscape is challenging at this time, we have full intentions to reopen all of our stores that have been impacted,” she said. “Obviously, we’re all standing by to hear guidance per city, but as soon as it’s deemed safe for our employees and customers, we will resume full retail operations.”
Asked about the permanence of the layoffs, and whether the company would aim to rehire staffers who have been cut, the spokeswoman did not comment beyond that the company expects to be “fully staffed” whenever stores are able to reopen.
While the brand has just over 30 stores in the U.S., Europe and Asia, Chrome Hearts told WWD last year in a rare profile that its best-performing market is the U.S. Overall the company, majority-owned and operated by the Stark family since 1988, employs about 900 people worldwide, handling nearly all of its own manufacturing in the U.S.
Chrome Hearts has worked to cultivate an aura of exclusive mystery about it. There are no signs on its retail shops. It does not sell online. It doesn’t even offer a digital look book of its expensive wares, which beyond jewelry and accessories include apparel, fragrance, outlandish homewares (think a $6,000 toilet plunger and a $160,000 ebony dining table) and even custom car interiors. It does some wholesale business, in boutiques like Riccardi in Boston; Hirshleifers; Nuages in Aspen; George Green in Chicago; Joy Fashion in St. Moritz, and Maxfield in Los Angeles, as well as shop-in-shops at Bergdorf Goodman and Selfridges. But the whole of retail, outside of big-box and grocery, has been severely impacted by measures to prevent the spread of the coronavirus.
The brand has never revealed its sales figures and declined to do so in speaking to WWD last year. But last year it sold a 10 percent stake to a private equity firm for $150 million, leaving its valuation at the time around $1.5 billion. Valuations are typically based on total annual revenue as well as growth prospects, so revenue for Chrome Hearts could fall somewhere in the range of $200 million to $400 million.
Laurie Lynn Stark noted to WWD at the time that “business is growing tremendously. We can’t believe they are saying retail is dead and people aren’t spending.”
The brand was planning to expand its retail empire further this year, and just opened its 32nd store in the Caribbean island of St. Barth’s. That store is now closed as well, along with all locations in Japan, where it has 10 stores. Plans to open two more units over the next year, one in London’s Mayfair area and another on Quai Voltaire in Paris, are said to be on indefinite hold. The only Chrome Hearts locations open currently are the six stores it operates on Mainland China, Korea and Taiwan, regions which have just begun to allow businesses to reopen after being essentially under lockdown since January.
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