Recession forces S&K to close its stores
- July 1, 2009
Perhaps it’s fitting that S&K Famous Brands Inc. ran out of gas just a few days before General Motors filed for bankruptcy. The Richmond-based menswear chain was started 42 years ago by two men selling suits out of the trunk of a Cadillac.
The recession brought down both companies, but unlike GM, S&K isn’t coming back. The Glen Allen-based retailer filed for bankruptcy protection from creditors earlier this year but was forced to liquidate after failing to attract a buyer or investors. “In spite of our best efforts, the current economic climate left us with no choice but to close down the business,” Jonathan M. Tibus, S&K’s chief restructuring officer, said in a news release.
Company officials say S&K simply could not overcome a perfect storm of economic events: an already slow retail environment, a tightening credit market and a recession that led to a sudden drop in consumer spending last fall. In the end, the company could cover its debts but did not have the money needed to keep its stores well stocked.
Boston-based Gordon Brothers Retail Partners LLC won the right to oversee going-out-of-business sales that began on May 21 at all 105 remaining S&K stores in 26 states, including 20 in Virginia.
S&K, which sold its corporate headquarters, main store and distribution center in March, is guaranteed $7.3 million in revenues from the liquidation, all of which will be applied to debt. The stores have until Aug. 31 to sell their remaining inventory.
The company still had 750 employees in May. About 40 corporate workers were laid off with the liquidation decision; store employees will stay on until the going-out of-business sales are completed.
The company was founded in 1967 by I.J. “Hip” Siegel, a retired Richmond grocer, and his brother-in-law, Abe Kaminsky. S&K eventually grew to more than 200 stores and was considered one of the country’s premier men’s clothing retailers