Another retail giant collapsed due to the economic fallout from the Coronavirus pandemic. RTW Retailwinds, Inc., the parent of New York & Company, filed for bankruptcy protection last week. Consequently, the specialty women's omni-channel retailer plans to shutter most, if not all, of its brick-and-mortar stores. Its eCommerce business will continue to operate.
In a news release, CEO and CFO Sheamus Toal said the “challenging retail environment coupled with the impact of the Coronavirus pandemic have caused significant financial distress on our business.”
The writing has been on the wall about the company’s demise for some time. RTW had a rocky 2019, reporting a $61.9 million operating loss after declaring $4.2 million in operating profit in 2018. Net sales plummeted 7.5%, down from $893.2 million in 2018 to $827 million in 2019.
The closing of New York & Company ($NWY) stores could pave the way for other retailers to gain a stronger foothold in the apparel and accessories space. Specialty retailer J. Crew, which announced in May that it would also seek bankruptcy protection, plans to keep its stores open. Our first image tracks the retail footprint of both companies:
Even before the pandemic, then-CEO Gregory Scott said the company experienced a decline of traffic in the stores. RTW announced plans in March to permanently close up to 150 locations. During the fourth quarter of 2019, 27 locations closed.
The 102-year-old company owns 378 retail and outlet locations in 32 states, of which 92% have reopened since closing due to the pandemic.
Similar to other retailers, New York & Company furloughed most of its store associates during the onset of the pandemic in March. However, the company has been losing employers long before the pandemic occurred. Its LinkedIn employee headcount decreased from 2,600 to 2,300 in December 2019. As of July 17, 2020, it lost 15.22% employees compared to one year ago. The employee headcount hasn’t been this low since 2017.
In its full-year 2019 earnings, RTW said it wanted to focus more on its digital-first portfolio of brands. However, if the company’s social media footprint is any indication, there’s been much progress made on the digital front. Facebook Likes for New York & Company have essentially remained flat over the last three months.
How many other companies fall during the pandemic is yet to be seen - but as the retail apocalypse picks up, and as cities and state governments struggle to contain the outbreak, it is increasingly likely that more retailers will join the J. Crews and New York & Co.s of the world.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales, and app ratings - and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.