What a difference a year makes.
Almost 12 months after Grafton Fraser Inc. stepped in to save Jones New York’s 37 factory stores in Canada from closure, with the intent to expand the brand’s retail footprint to at least 50 locations in the next five years, it’s back on the chopping block.
Great American Group (GA), a Los Angeles-based liquidation specialist, on Friday announced it will close all 37 Jones New York factory stores north of the border.
“Great American Group’s history of working with the brand through our appraisal services has given us leverage in knowing their merchandise, and our experience working with fashion retailers means we understand their customers,” Scott Carpenter, President of GA’s retail solutions division, explained. “Over the next several weeks we will work to quickly sell through the apparel and accessories while maximizing its value.”
Going-out-of-business sales started June 14 and are expected to last until all of the merchandise is sold. Initial discounts comprise up to 40 percent off all apparel and accessories, including clearance. GA said that select furniture, fixtures and equipment at stores and distribution centers will also be available for sale.
It’s been a whirlwind year and a half for Jones New York. In January 2015, private-equity firm Sycamore Partners—which acquired The Jones Group for more than $2 billion in 2014—announced it was ending the brand’s wholesale business and closing 127 retail locations to pursue “strategic alternatives.” Two months later, Sycamore sold it to Authentic Brands Group and last summer, Grafton bought the chain’s Canadian arm.
But according to court papers filed June 6, the brand’s business north of the border has continued to struggle and it is now in default to its lenders. One creditor, CIBC, is reportedly owed more than 30 million Canadian dollars ($23.5 million).
“The company is facing a liquidity crisis as a result of…unexpectedly high inventory costs and excess inventory hangover from the acquisition of the business in 2015 and lower than expected retail sales,” the filing said.
About 300 employees are expected to lose their jobs.