Kenneth Cole Productions is gearing up to close nearly all of its retail stores during the course of the next six months.
According to a report in Bloomberg, Kenneth Cole CEO Marc Schneider confirmed in an email to Bloomberg that it will close its 63 outlet stores. Once the outlet stores are closed, Kenneth Cole will have only two stores in the U.S. to sell its clothes and accessories. Instead of focusing on retail stores, Kenneth Cole’s Schneider said the company will focus its efforts on its website and international business. It also plans to sell its ware via other retail partnerships.
“As we continue on our path of strengthening our global lifestyle brand, we look to expand our online and full-price retail footprint across the globe,” Schneider said. “We need to focus our energies and resources to better serve the consumer on their terms.”
According to Edward Gribbin, president of Alvanon, a consulting firm that was quoted in the Bloomberg report, Kenneth Cole’s outlets stores are suffering from increased competition from the likes of Coach and Michael Kors.
For some time now, retailers with physical stores have been suffering from online competition. In May, the strategic retail advisory firm HRC Advisory released the findings from a study showing that operating earnings from sales have declined by up to 25 percent as a result of a shift from in-store to online.
“Retailers haven’t yet figured out how to grow and maintain brick-and-mortar profitability while trying to keep up with the likes of Amazon in today’s increasingly digital environment,” Antony Karabus, CEO of HRC Advisory, stated in a press release. “Retailers need to recalibrate and fine-tune their economic business models to reflect today’s new variable cost-oriented online model. Those who can engage customers and meet their heightened expectations, while offering complete visibility of inventory availability, can be lucrative in reducing markdowns and improving inventory productivity.”