New York & Company has taken a bite out of fashion's big apple. The chain caters to working women ages 25 to 45 looking for moderately priced apparel (jeans, dresses, and coordinates) and accessories (sunglasses, costume jewelry, handbags, and hosiery), mostly at the mall. It sells its proprietary branded fashions at more than 500 stores, including a growing number of New York & Company Outlet shops, in 40-plus states and online. Founded in 1918 and operated as a subsidiary of Limited Brands (since renamed L Brands) from 1985 to 2002, the chain was sold for $153 million to an investor team including former CEO Richard Crystal and Irving Place Capital, who took New York & Company public in 2004.
The New York-based retailer operates stores in 43 US states. California, New York, and Texas are its largest markets and home to more than a quarter of its retail stores.
While the apparel labels say New York & Company, more than 90% of the company's clothing is made outside the US, primarily in China, Indonesia, and Vietnam.
After a prolonged stint of unprofitability, New York & Co. is back in the black. The company reported net income of $2.4 million in fiscal 2014 (ended January), after posting a profit of $2.1 million in fiscal 2012. However, the company's sales declined by 3% in 2014 versus 2013, to $939.2 million (from a pre-recession high of nearly $1.2 billion). The company blamed the decline in sales to a 52-week year in 2013 versus a 53-week year in fiscal 2013, and a smaller store base, partially offset by a 1% gain in same-store sales.
The return to profitability is the result of a multi-year restructuring and cost cutting program (launched in 2009) designed to save about $175 million by 2014.
New York & Company is reaping the benefits of a restructuring and cost cutting program, elements of which included job cuts at the corporate and store levels and the closure of many underperforming stores. Indeed, the retailer has shuttered about 70 locations during the past four years. However, it's expanding its New York & Company Outlet store operation, which has proven to be a profitable channel for the company. Indeed, New York & Co. plans to continue opening new outlet stores each year, and believes that over the long term, the outlet business could grow to between 75 and 100 locations, up from about 50 in 2014.
E-commerce is another growth area for the women's apparel chain.
Sales and Marketing
To compete in the competitive women's apparel and accessories arena, the company has been gradually increasing its spending on advertising, to $31.1 million in fiscal 2014 (ended January), from $26.6 million in fiscal 2012. The fashion chain, which targets women between the ages of 25 and 45, also boasts a presence in the crowded beauty market through its partnership with Inter Parfums to make the City Beauty line of bath and body care products. Other apparel chains, including rivals ANN Inc. and Gap, have launched personal care product lines in recent years.
Irving Place Capital, formerly Bear Stearns Merchant Banking until 2009, owns nearly 50% of the company's voting shares.