New York & Company has taken a bite out of fashion's big apple. The chain caters to women 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 via more than 550 stores, including about two dozen 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. More recently, the company has struggled to turn a profit.
New York & Company is well into a multi-year restructuring and cost cutting program (launched in 2009) designed to save about $175 million by 2014. Elements of the plan have included job cuts at the corporate and store levels and the closure of many underperforming stores. Indeed, the retailer has shuttered more than 30 locations during the past two years and plans to continue to trim its store count. On the plus side, it has begun opening outlet stores, which feature merchandise found in its main line stores, merchandise unique to the outlet stores, and clearance items. Over the long term, the company expects to grow the number of outlet stores from about two dozen at present to as many as 75 locations.
New York & Company is tasked with improving sales and profitability at the chain, which because of the deep recession and weak demand for women's apparel, have been flat or down. While the company's sales inched up by about 1.5% in fiscal 2011 (ends January) vs. the year earlier period, the chain lost money for the fourth year in a row. Same-store sales increased by more than 1% (as compared to a decline of nearly 12% the previous year).
Sales and Marketing
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.
While the apparel labels say New York & Company, nearly 100% of the company's clothing is made outside the US, with China, Macao, and Hong Kong accounting for about 60%.
Irving Place Capital, formerly Bear Stearns Merchant Banking until 2009, owns about 51% of the company's voting shares.
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