Fashion house BCBG closing stores, restructuring

Dive Brief:

Fashion company BCBG Max Azria Group Inc. plans to reduce its store count and refocus operations to in-store boutiques while increasing its online presence and licensing initiatives, spokesperson Seth Lubove of Sitrick & Company said in a statement emailed to Retail Dive.
The shift comes amid pressure from online sales growth and shifts in customer shopping behavior, Lubove said.
BCBG Max Azria Group has more than 570 boutiques globally, including more than 175 in the U.S. BCBG is working with AlixPartners LP to help with debt restructure and hopes to avoid a bankruptcy filing, Bloomberg reports.

Dive Insight:

Founded in 1989 by Tunisian fashion designer Max Azria (who was also CEO until last year), BCBG Max Azria Group’s fashions count the likes of Angelina Jolie, Rachel Bilson, Eva Mendes, Kate Winslet, Victoria Beckham, Alicia Keys and Catherine Zeta-Jones among its fans. But the rise of e-commerce and changing consumer expectations, including new pressures to speed up the supply chain to slake the thirst for “see now, buy now” releases, have taken a toll.

“Like so many other great brands, BCBG has been negatively impacted by the growth in online sales and shifts in customer shopping patterns and, as a result, has too large a physical retail footprint,” Lubove said in his email. “In order to remain viable, the company — like so many others in its industry — must re-align its business to effectively compete in today’s shopping environment.”

BCBG is "looking at a variety of options to accomplish the restructuring of the company," Lubove added.

BCBG is just the latest in a series of retailers kicking off 2017 by shuttering stores. In the wake of a disastrous holiday shopping season, Macy’s announced Jan. 4 it could slash more than 10,000 jobs as it closes 68 stores and reorganizes its remaining locations. A day later, Sears Holdings said it will close an additional 150 unprofitable locations, including 108 Kmart and 42 Sears stores, in order to curtail losses. And The Limited’s time as a brick-and-mortar merchant has run out: The apparel retailer officially boarded up all 250 stores nationwide.

“The impact of fast-fashion and e-commerce on traditional department store retailers like Macy’s, Nordstrom, Sears and J.C. Penney certainly magnifies the challenges that department stores face in a market that is moving quickly toward off-price retailers, where [consumers] can get fashion for a good value,” Jerry L. Hoffman, president of urban real estate consulting firm Hoffman Strategy Group, recently told Retail Dive.