Kenneth Cole Productions will close all but two of its U.S. brick and mortar stores, Bloomberg reports.
The fashion house and shoe retailer will take the next six months to shutter its 63 outlet stores, leaving one store in New York City's Bowery neighborhood and another in the Pentagon City mall in Arlington, VA, according to Kenneth Cole's website.
Kenneth Cole CEO Marc Schneider told Bloomberg the move will allow the retailer to focus on its e-commerce and international business. “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,” he said. “We need to focus our energies and resources to better serve the consumer on their terms.”
Kenneth Cole's renewed focus on online sales signifies a major shift for the retailer, which has spent the last three decades building up its brick-and-mortar chain. After going pubic in 1994, founder Kenneth Cole took the company private again in 2012 in an effort to regain control of the brand and re-infuse it with creativity without what he characterized as the unhelpful pressure of Wall Street.
But that hasn’t been easy, which Cole also acknowledged in a 2015 interview, because even fashion has increasingly become a commodity. Early last year, Cole brought in retail veteran Schneider to take take over the CEO role and drive transformative initiatives for global growth.
Kenneth Cole has increasingly faced competition from the likes of rivals Coach and Michael Kors, two luxury retailers that have also recently moved to shutter outlet locations, citing brand damage from sweeping discounts. Coach announced in August it would pull out of 250 stores in order to sell at higher price points elsewhere, just after Michael Kors said it would no longer participate in department stores' friends and family sales or accept coupons. Heavy promotional environments and off-price competition are hurting department store margins — and especially their relationship with luxury brands, which have been department store mainstays for decades.
While Kenneth Cole will shutter nearly all of its American stores, it will continue to sell merchandise through other retailers. The company has also licensed many products, leveraging its name without directly selling its own merchandise. But licensing agreements limit a company's control over its brand, which could make it even harder for Kenneth Cole to thrive moving forward.