Could Wilsons and Bass Retail be the next stores to fall?
Factory outlet doors under the Wilsons Leather and G.H. Bass & Co. footwear nameplates suffered a precipitous decline, and soon they might become extinct if one Wall Street analyst’s speculation about a possible closure comes to fruition.
Owned under the G-III Apparel Group umbrella, Wilson’s has been in operation since 1899 and Bass since 1876. And while they once dominated the mall sector, existing doors now are factory stores within premium outlet centers.
B. Riley FBR’s analyst Susan Anderson said on Thursday that G-III is likely to end 2019 with 213 stores for the two brands—down from 353 doors at the end of 2016. Most current locations have about three years left on their leases, and the number of remaining doors make it “manageable to shut the entire business” for Wilsons and Bass, she said, noting that some locations could be converted to the more profitable DKNY and Karl Lagerfeld store banners.
Anderson cited the recent hire of outside consultants to advise on the struggling retail business as an indication that closures are a real possibility. A shutdown or restructuring of the Wilsons and Bass retail doors could offer an earnings upside because the “savings from the profit-losing retail business should more than offset the impact from China tariffs,” she said, presuming tariffs remain at 15 percent.
With the rise of online shopping, as well as tourism hitting the skids, there’s been less of a need for consumers to visit brick-and-mortar outlets in search of deeply discounted overstocks when they can just as easily treasure hunt online. For example, when Ralph Lauren Corp. reported fourth-quarter results earlier this year, it said its outlet business was down 7 percent, offset by a 6 percent gain in the digital channel.
Battling competition from the off-pricers, the outlet sector might begin to see slower growth. The 340,000-square-foot complex known as Empire Outlets–New York City’s first outlet mall in the borough of Staten Island–opened its doors in May. And while there’s been leasing activity, so far only about one third of the retail spaces appear to be occupied, with the entire fourth floor closed off to foot traffic as of August, per the New York site for Curbed.com.