Lifetime Brands Latest Retail Casualty; Plans to Close All Stores, Distribution Center
- Sep 23, 2008
Lifetime Brands Inc., a nationally branded kitchenware, tabletop and home decor products company, is the latest casualty among retailers to announce the closing of stores. The company plans to close all of its remaining 53 outlet retail stores as well as its York, Pa., distribution center in 2009. The stores being closed by Lifetime include 39 Pfaltzgraff factory stores, eight Farberware outlet retail stores and six clearance stores. The company will continue to operate its Internet and mail order catalog businesses. Clearance sales at the stores will start Tuesday and should be completed by Dec. 31. The company has entered into an agreement with a joint venture between Gordon Brothers Retail Partners and Hilco Merchant Resources L.L.C. to manage and operate the inventory clearance sales at the stores. Lifetime entered into an agreement with RCS Real Estate Advisors to terminate the store leases. The company expects to incur a pre-tax, non-cash charge of up to approximately $7.5 million with respect to the write-off of fixed assets associated with the stores, the York distribution center and related operations. Lifetime also expects that it will incur approximately $15 million of other pre-tax charges. “Despite the many actions we have taken to streamline and improve the operations of the retail stores, in today’s difficult retail environment they have continued to encumber our company’s earnings. In addition to eliminating this burden, today’s actions will enable us to focus our efforts on growing our core wholesale business,” Jeffrey Siegel, Lifetime’s chairman, president & CEO, said in a prepared statement. Lifetime’s announcement comes about a month after CPN reported bankruptcy filings for Mervyn’s and Steve & Barry’s. On Aug. 22, CPN reported on Walgreens’ cutting its expansion plans, Starbucks will close 600 U.S. locations and The Gap plans reduce its 40 million square feet across the country by 10 to 15 percent over the next three to five years. Higher gas and food prices have caused many consumers to forego spending on non-essentials, according to The Outlook report prepared by Marcus & Millichap Research Services for May. This trend is evident when reviewing sales performance by retailer segment; drugstores and wholesale clubs are faring best, while declines among furniture, apparel and department stores are accelerating. Retailers focused solely on home furnishings and other non-necessities are struggling, with chains including Levitz, Sharper Image and Bombay Company recently filing for bankruptcy, the report added.