New York & Co. is going to close 50 stores.
Specialty apparel retailer New York & Co. said Thursday it will cut 310 mostly managerial positions and close up to 50 stores over the next five years in an effort to counter declining consumer spending.
The moves are expected to save the company about $175 million over that span, but will result in approximately $25 million in fiscal fourth-quarter restructuring charges.
New York & Co.'s stock price has tumbled nearly 60 percent in the past year as its financial results worsened. Women's apparel retailers, including New York & Co., have been among the hardest hit as consumers cut back spending due to the deteriorating economy, mounting job losses and a prolonged housing slump.
Meanwhile, chain Against All Odds has filed for Chapter 11 bankruptcy protection.
Against All Odds, which rode the popularity of the hip-hop and rap culture to build a chain of 64 stores in eight states, with sales of more than $120 million, is the latest victim of an economic triple whammy that has caused a wave of retail bankruptcies. The company, in court documents filed with the U.S. Bankruptcy Court in Newark on Monday, said it found itself with frozen lines of credit, suppliers demanding cash and declining sales as the crucial holiday season approached.
The company stated in the documents that it has not decided which of its 64 stores will conduct going-out-of-business sales. Against All Odds plans to close its West Coast stores and reorganize its Northeast locations, or find a buyer for those stores. The company intended to open 25 stores in 2009 but has canceled those plans.
Howard Bader, an attorney for the chain, said the company's intent is to keep all of the New Jersey stores open. "We're trying to reorganize the company," he said. "As you can imagine, with the economy and trying to deal with all the landlords, it's been very, very difficult, but [the company] is very, very positively disposed to move forward."
Retail analyst Howard Davidowitz said Against All Odds is a prime example of the types of retailers most at risk in the current economy.
"In this environment, when you don't have access to capital, and you've got a tremendous consumer downtrend, what do you do? You collapse," said Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and investment banking firm based in New York City. Davidowitz said the most likely scenario is Against All Odds will follow other retailers into liquidation.