One-hundred twenty days. Maybe men’s retailer Bachrach could get an award for that.
In four months and at a cost of about $1.3 million, the company filed for Chapter 11, reorganized and emerged nine stores lighter, armed with a new plan for its future.
“The most important thing that we had to accomplish was to close the non-performing stores,” said president Brian Lipman of the bankruptcy’s objective. “Our portion of stores was spread between A, B and C malls. We’re a 100 percent mall-based retailer and some of the locations we had were either in the wrong malls for the product price point we sell or the occupancy costs were just out of the stratosphere. We just couldn’t make money in those doors. And that’s what we accomplished.”
Bachrach, via its in-court restructuring, closed nine doors and now has a fleet of 15 along with e-commerce, in both of which the company sees growth opportunities. While the retailer will consider store growth, that will be in existing markets and will avoid spreading the business too thin, which was one of its issues pre-bankruptcy, Lipman said. It will also look to nab a new, younger customer with the launch of a more fashion-forward, digital brand called Lucky Prey aimed at 20- to 35-year-olds. That compares with a 35- to 55-year-old target demographic for the Bachrach label.
Lucky Prey will also have lower price points with nothing over $198 for a suit and separates in the range of $99 to $198. The Bachrach label, by contrast, starts at $198 and goes up to about $598 for similar looks.
“We see that the future of retailing or certainly the growth in the future of retailing is coming from e-commerce,” Lipman said of the thinking behind launching an entirely separate label. “We also identify that the biggest demographic that’s shopping online and the biggest demographic in the next 10 or 15 years shopping online is the younger customer. For them, working and ordering and being familiar with e-commerce and buying online, it’s the way to go. They hardly buy anything in a store anymore and Bachrach, traditionally, is a little older customer, more conservative. So we feel that by launching and starting to attract the younger customer with a product that’s more in line with what they like to wear, we’ll be able to grow the business without splitting sales between Bachrach and Lucky Prey. It will be incremental.”
The company plans to launch the new line in September or October.
A number of factors for not just Bachrach but other retailers conspired to push many into the recent raft of bankruptcies for companies such as Payless ShoeSource, The Limited, Rue 21 and BCBG Max Azria.
Lipman, who led a consortium to buy Bachrach for $12 million after its first bankruptcy filing in 2006, pointed to five main factors that have challenged retailers. First, store traffic was hit hard month after month, but Lipman said he’s seen a leveling off of that. Additionally, the issue of sameness across both malls and stores has also been taken to task, he noted, and more property owners and retailers are making a concerted effort to reinvent themselves. Meantime, landlords have readjusted their expectations and come down on rent. It’s in-store talent that remains a challenge, Lipman said.
“As far as I’m concerned the single biggest problem that all retailers are facing is the pool of experienced or willing staff members,” he said. “People who come out of college that want to choose retail as a career, that pool is getting smaller and smaller and the caliber of service is getting less and less. We have to spend more and more resources on training, teaching, mentoring and recruiting. It’s a revolving door and people would rather work for less but work in a tech industry job or in an office and not work Saturdays, Sundays and evenings.”
Bachrach has a dedicated team of recruiters that go from store to store and it’s tested in Detroit an at-home service. Sales associates will visit customers at their homes or offices and go over samples and bring back items for fittings. It’s that increased level of service that’s expected to help redefine the newly restructured business. The door-to-door program is expected to be rolled out to other locations.
“I think that’s making it easier and more comfortable for men to shop,” Lipman said, “rather than waiting for the customer to wake up and say, ‘I’m going to the mall to see if I can find a suit today.’”
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