According to CEO Mark Schneider, the New York-based brand will close its 63 outlet stores over the next six months and focus on other initiatives, including its e-commerce and international business, Bloomberg reported.
“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.”
Following the planned closures, Kenneth Cole will have only two brick-and-mortar locations left in the U.S., though it will continue to sell merchandise through other major retailers, including Macy’s and Lord & Taylor.
Kenneth Cole currently operates two non-outlet locations: one in New York City and another in Arlington, Virginia. It is unclear what will happen to both stores once the brick-and-mortar closings start this month.
As the retail market becomes more competitive, brands are struggling to maintain their outlet presence among other big rivals, such as Coach and Michael Kors. In addition, consumers are increasingly relying on digital platforms, such as Amazon, to find apparel and accessories at cheaper prices, avoiding shopping trips to outlet locations.
Kenneth Cole is actively pursuing more licensing deals to prepare for its digital transformation and generate more revenue in the future. But Ed Gribbin, president of apparel-consulting company Alvanon, said licensing agreements present their own potential risks, since companies may lose control of their brands.
“You might make money in the short term, but you lose touch with the consumer,” Gribbin said.
Kenneth Cole’s store closures follow its agreement with Global Brands Group in June, regarding Kenneth Cole New York, Kenneth Cole Reaction and Kenneth Cole Production Unlisted. The partnership was initiated in order for Kenneth Cole to expand its global brand representation, a crucial step as the company minimizes its brick-and-mortar fleet.