Fashion Reverie Investigates: Six Brands that Closed Their Doors in 2020

Image courtesy of newyorktimes.com

2020 was not a kind year for clothing, accessory, and beauty brands. That being said; the news was not as dire as first as reported in an article by www.fashionista.com, written on May 18, 2020 and updated on November 12, 2020. There is a popular misconception between “going Chapter 11” and filing for Chapter 7, which is going out of business forever.  

To further clarify this distinction, we spoke with Peter Arnold, a former Wall Street attorney who has worked in the fashion space for years. His experience includes five years as Executive Director of the CFDA, eight years as CEO of Cynthia Rowley and three as CEO of Cushnie et Ochs. Arnold explains, “Chapter 11 is a restructure; It’s a strategic tool.  It’s opportunistic and allows you to leverage your situation in a way that benefits you. For instance, you may be stuck in an expensive lease that would be beneficial to get out of.”

Many popular brands and stores such as J. Crew, G. Star Raw, and Lucky Brands declared Chapter 11 to buy some time to reorganize and restructure. Others shuttered the doors permanently and the latter are the focus of this article. We chose five fashion brands, and one beauty brand that range the spectrum from storied brands with a rich history, to brands led by bright young fashion stars.

Image courtesy of thenewpotato.com

Cushnie et Ochs

Carly Cushnie and Michelle Ochs were both Parsons School of Design students who hit it off and created their label in 2008. The business partnership dissolved in 2018, lasting a total of ten years. The aesthetic was sexy minimalism, strongly influenced by the 70s jersey pieces, similar to Halston looks created for his “girls” to wear to nightly Studio 54 outings. The Cushnie et Ochs brand combined Carly’s love of tailoring and Michelle’s skill in draping. As in vintage Halston, there were ample cut-outs in the midriff, neck chokers, mostly made of bodycon jersey fabric.

The response to the brand’s offerings was initially overwhelmingly positive. The who’s who of fashion had discovered the next bright new thing, a necessity to generate buzz and excitement and hopefully sales. At the height of their fame, the duo spoke on a segment of “Cadillac Confidential,” with Bergdorf Goodman’s Senior Vice President of Women’s Fashion, Linda Fargo, who said how much she adored the brand and the two designers, calling them “the body girls.” Fargo shared that Bergdorf immediately picked up the brand after seeing the debut spring 2009 collection. In 2009, the duo was also honored with the prestigious Ecco Domani Fashion Fund Award. At their height, Cushnie et Ochs dressed the right people: Michelle Obama, Beyonce, Selena Gomez, Blake Lively, and Jennifer Lopez.

Cushie et Ochs spring 2017 images courtesy of highfashionliving.com

As with many brands who are thrust into the spotlight early-on, the initial flurry of excitement could ultimately not be sustained. First and foremost was the lack of a strong business marriage at the brand such as that of Barry Schwartz at Calvin Klein’s that lasted from 1968 to 1999. Arnold cites the Calvin-Schwartz marriage as an ideal where responsibilities were clearly spelled-out, “a perfect counter point to Cushnie et Ochs.”

Arnold joined Cushnie et Och in 2015 as CEO, finding a company that had begun to unravel.  The designers were not getting along, and the excitement of the early days had faded. The clothes were unforgiving and were only flattering to a limited group of women of a certain age who assiduously maintained their physique and who could afford dresses that retailed upwards of $1,500. Carly Cushnie’s wealthy father, Guillermo Pacanins Acevedo, made the initial investment, and the family investment skewed the partnership in Carly’s favor. The ensuing deal with Farol Asset Management further eroded the already strained relationship. Managing Partner, Robert Azeke, specialized in investing in businesses of color, and at first glance, the investment seemed to fall in line with the firm’s direction. Unfortunately, Azeke did not have any prior experience with the fashion industry nor a clear understanding on what a realistic return on investment would be in the fashion sector.

“There were flawed expectations that investing in a ten-million-dollar company would turn it into a 50-million-dollar one in a few years,” Arnold shared. Ochs and Arnold left in 2018, and Neiman Marcus and Bergdorf Goodman stopped purchasing product, as the core customers had moved on to other brands. The COVID-19 pandemic was just the nail that closed the coffin. In June 2020, Michelle Ochs sued Carly Cushnie for two payments of $180,000, for salary owed. She filed a complaint in a NY Federal court.

Image courtesy of cnn.com

Elizabeth Arden Red Door Spas

Beauty legend, Elizabeth Arden, nee Florence Nightingale Graham in 1878, was a nursing school drop-out who discovered she had a natural talent for giving facials. She saw the opportunity to open a salon-spa that would deliver a five-star experience to the women who shopped the high-end stores on Fifth Avenue. She opened the Fifth Avenue flagship in 1911, with the distinctive red door that branded the salon for years to come. By the 1930’s, Arden owned over 100 salons internationally. Her legacy includes introducing the concept of the makeover and promoting the then revolutionary idea of holistic beauty. She died in 1966 as the sole owner of her empire.

Jitka D’Ambrosio, former Regional Director for Maryland and Washington D.C., joined the operation in 2010. According to her, the eighties and nineties were the Red Door’s glory years. “People had quite a bit of disposable income. There wasn’t that much competition and it was the only unified spa chain of its kind, comparable to the Ritz Carlton. Both companies deliver consistency of experience at all their locations.”  D’Ambrosio praised the highly structured operation that invested considerable time and money in onboarding the employees and in on-going training. The Salons presented a unique opportunity for the employees to cross sell their services. At its height, the Red Door was a regular destination for its well-to-do core 45-60 customers, and often an inter-generational gathering place.

Image courtesy of Elizabeth Arden

As for the demise, retail changed, in part due to the new Shared Economy platform, in which people leverage one-another (Lyft, Uber, Rover, Airbnb). Stylists, particularly the younger ones, who had a less favorable compensation structure than the veterans, went out on their own taking their clients with them. D’Ambrosio blames the company’s flawed marketing model as a factor in the downfall. It was an attempt to capture the Millennials, whom management believed had money to spend. The resulting marketing materials were edgy and turned off the existing 45 to 60-year-old core customers. Furthermore, the one size fits all marketing for all locations failed to tailor their message to the varying regional markets. The final stake to the company’s heart took place in May 2019 when former CEO Todd Walter rebranded the Red Door as Mynd in a final effort to reach the illusive Millennials. Customers were confused as the company failed to inform them of the name change. Mynd declared bankruptcy in July 2019.

BLDWN

BLDWN began in Kansas City in 2009 as Baldwin, a heritage denim brand geared to men with the tagline, “Clothes designed to last.” At its height, it had offices in Los Angeles and Kansas City and employees in seven stores, spanning Los Angeles, New York, San Jose Austin, Dallas, and two stores in Kansas City.

Image courtesy of sourcingjournal.com

In 2018, the company attempted to rebrand itself as a contemporary brand with a greater focus on women’s clothing. In addition to a rebranding, in August 2019, BLDWN opened a 1,100 sq. ft. flagship on Los Angeles’ tony Melrose Avenue, and hired Jonathan Crocker as CEO and Creative Director. Crocker was the former Vice President for Global Communications at AG Jeans. He was given a two-year contract and tasked with repositioning Baldwin into a ready-to-wear brand by releasing a men’s and women’s ready-to-wear collection for three consecutive seasons.

The new messaging required that customers visit the stores to experience and buy into the new ready-to-wear branding. The COVID-19 pandemic was terrible timing as customers were understandably reluctant to shop brick and mortar stores after March 2020. The BLDWN failure was due to an all-in expansion effort rather than staying with what it was known for—premium men’s denim.

 On March 17, 2020, BLDWN made an announcement on Instagram, that it would be closing its doors to try to help stop an increase in COVID-19 infections. All employees were let go and once the existing inventory is sold online, the brand will end. The website (www.bldwn.co) confirms that the company will not be taking any new orders or returns.

Image courtesy of businessoffashion.com

Sies Marjan

Dutch designer, Sandar Lak, came out of the gate strong. He had worked for Dries Van Noten before launching Sies Marjan with Joey Laurenti, part of the Opening Ceremony team, another cool downtown brand. The effort was bankrolled by Nancy and Harold Marks, billionaires who had also worked with American couturier, Ralph Rucci. Lak’s first collection debuted in September 2016 at New York Fashion Week (NYFW), boasting an A-list celebrity front row including Anna Wintour.

The fairy tale continued when shortly afterwards, Barneys New York gave Sies Marjan a US department-store exclusive. Two years later, Lak won the CFDA Award for Emerging Designer of the Year. That same year, he expanded to include menswear, and dressed a myriad of celebrities including Beyonce, Jennifer Lopez, and Zoe Kravitz who loved the brand’s easy lounge wear silhouettes and saturated color palette.

Sies Marjan spring 2020 images courtesy of runwaymagazine.com

According to The New York Times, Lak cited the global COVID-19 pandemic as the reason for the company closing. Sies Marjan was dependent on celebrities being seen out and about and on red carpets wearing the clothes which stopped abruptly in March of this year. Sies Marjan was also an unfortunate victim to the Barneys’ closure and a cautionary tale for designers to not put their eggs in one basket.

The Modist (Dubai)

Dubai has been a designers’ mecca for decades. According to fashion stylist Mimi Lombardo, “the malls are gorgeous and even the floors sparkle.” The problem is that culturally, Muslim women who wear hijab cannot openly wear their Western designer finery in public.

Image courtesy of abouther.com

The Modist founder, Ghizlan Guenez, saw an opportunity to present luxury retail with a focus on modest fashion that would cater precisely to this underserved demographic. She launched the Modist in 2017. It was a shopping site and a resource for women who wanted styling tips to help them dress modestly yet, wear the designer clothing they loved.

The Modist was a contender in the fashion tech company space and was ready to play in the same arena as giants Netaporter, Farfetch, and Moda Operandi but fell victim to being the small fish who simply couldn’t compete with the big fish in the same pond. According to The New York Times, larger e-commerce retailers realized the opportunity Guenez had discovered, and began adopting the same strategy. They added full-coverage categories to their websites, declaring war on the Modist. Guenez tried to fight-off Net-a-porter and managed to get investor money, but the former was too large and powerful. The end was near when the pandemic erupted, and investors tightened their wallets. It was unlikely however that the Modist would have prevailed, pandemic or not. The Modist closed permanently on April 2, 2020, citing the global pandemic as the reason.

Matter

Founders Renyung Ho and Yvonne Suner launched their Singapore-based company as an ethical fashion brand that partnered with rural artisans and used heritage-based textiles. The company made apparel that was responsibly sourced reinterpreted in a modern manner that told a story. Customers felt engaged with the clothes and were encouraged to view them not just as clothing but as symbols of a cultural heritage. Matter’s social media was educational and interactive, inviting customers to talk and post pictures about how they engaged with the brand.  Designs were more forgiving as pants never had zippers, just buttons and fabric belts. Leftover fabric offcuts from every order were collected by production partners and repurposed sometimes used by other brands they worked.

One core principle was to help enable textile craft to continue. They would incorporate digital and mechanical processes to help efficiency if needed to help the craft survive. Matter seemed eminently suited to long-time environmentalists and to millennials who are committed to products that are organic and who question production methods.

Images courtesy of matterprints.com

The global pandemic was not kind to an already delicate operation in which ethically made goods are still more expensive to produce. It’s likely that the founders assessed the situation when the pandemic hit and decided to shutter the company before they began losing too much money. They may have foreseen that many people would lose their jobs and be hesitant to continue to purchase Matter’s more expensive goods, regardless of the positive messaging.

The company posted a heart-felt good-bye message on their website (www.shop.matterprints.com) in April 2020 that read, “This is not goodbye forever. This is goodbye, for now.” The website remains open to answer customer questions and concerns and even until the end, honors their commitment to their artisans by refusing to slash remaining inventory to rock bottom prices.  

Lessons to Be Learned

According to Arnold, the CFDA Vogue Fashion Fund is emblematic of the systemic problem of brands failing to sustain their initial success. “Every year, the Fund anoints 10 designers who are immediately subjected to intense focus and pressure; the high beam of attention is part of the equation.”  What needs to happen next, he continues, is for the creative to find a solid business partner. Arnold holds out hope as designers such as Michael Kors have been willing to work closely with their business partner (John Idol) and have committed to commercialize their name in order to capture a far greater market share than if they had limited their efforts to the tiny and notoriously fickle high-end designer fashion customer pool.

Image courtesy of matterprinting.com

As for the COVID-1919 pandemic, it has served to realign expectation that anyone could create a 500-million-dollar brand. The pandemic was not the only reason brands have failed but served to accelerate the process. Once we are past the pandemic, we may be looking at a new model in which designer brands become more self-sufficient, leaner, and less reliant on celebrity endorsements and store exclusives.

—Vivian Kelly

 

 

 

 

 

 

Comments

  1. Fantastic. This sort of reporting put Fashion Reverie in the class with BofF. Great job William & Vivian! Congratulations.

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  1. […] Kelly examined fashion and beauty brands that had gone out of business in 2020. Her article “Fashion Reverie Investigates: Six Brands that Closed Their Doors in 2020” gave an in-depth look at some of the reasons these brands shuttered. Some went of business due […]

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