Heritage Brands Outlet Stores To Close

The parent company of Calvin Klein and Tommy Hilfiger will shutter all of its Heritage Brands outlet stores, CNN Business reported.

New York-based PVH Corp. said a total of 162 Heritage Brands shops, including the Van Heusen, IZOD, Warner’s and Olga clothing lines, are expected to close by the middle of next year.

PVH also said it plans to cut 12 percent of its corporate workforce, about 450 positions, at its Calvin Klein, Tommy Hilfiger and Heritage Brands stores. The move is expected to save the company, which has 40,000 employees, $80 million annually.

“We did not take these decisions lightly, as our Heritage Brands Retail business is our oldest retail business yet no longer met appropriate return metrics,” PVH CEO Manny Chirico said in a statement.

The announcement comes on the heels of PVH’s report last month that revenue had dropped 43 percent to $1.34 billion in the three months ending in May. Stores were closed for an average of six weeks due to COVID-19.

“While these decisions are always challenging, they are strategically important for the long-term health of PVH,” said PVH President Stefan Larsson in a statement. “The COVID-19 crisis is dramatically reshaping the retail landscape in ways that we believe will be long-term in nature and far-reaching in terms of consumer purchasing behavior.”

The number of U.S. retailers filing for bankruptcy keeps growing. The list includes giants such as J.Crew, JCPenney and Neiman Marcus. Two weeks ago, Seattle-based high-end kitchen retailer Sur La Table filed for bankruptcy in a plan that may lead to its sale to affiliates of Fortress Investment Group.

The number of store and mall closures nationwide has raised the question of what will happen to the real estate they sit on.

In one example, developers are turning parts of a 41-year-old shopping center near Seattle into Avalon Alderwood Place, a 300-unit apartment complex with underground parking. Stores will still take up 90,000 square feet of Avalon. But the focus of developing the mall has fallen to housing as anchor tenants, not retail.

“This project is a great example of evolution in the shopping center industry,” said a spokesperson for Brookfield Properties, which owns the property and is collaborating with AvalonBay Communities Inc. on the residential component.  “Today, people prefer to live in smaller spaces and want walkable developments rather than relying on vehicular transit. This project caters to these needs.”