Robb & Stucky and the future of high-end retail
When a major retailer files for bankruptcy, their suppliers don't just take a hit because they won't be repaid all the money they're owed. They take a long-term hit on the future business they lose.
Some companies can take those hits. Some cannot.
In 2007, Wickes, then a 39-store retailer with $396 million in sales, filed for bankruptcy. You may remember that filing hit now-defunct suppliers Caye and DeCoro pretty hard - for nearly $6 million.
You have to wonder how much, if anything, will be left for suppliers in the bankruptcy of high-end Florida-based retailer Robb & Stucky, which owes secured creditors more than $30 million.
As unsecured creditors, the top five suppliers in the case are owed more than $3 million. Robb & Stucky's revenue in its last fiscal year was $139.7 million, down from peak revenue of $273.7 million in 2006.
And while I seriously doubt I'll get too many calls back about this topic - I've already contacted many of the suppliers who are vendors to Robb & Stucky currently - I'm wondering what the future of high-end retailing is IF such a large retailer disappears. (The company is hoping to survive as a going concern, but liquidation also is a possibility.)
I know there are many high-end stores, from Baer's and Gabberts to Gorman's, Louis Shanks, Cantoni and others, but there are few like Robb & Stucky, in multiple markets.
Robb & Stucky has been known as a trend setter and a fashion leader. Over the years they have been able, according to industry scuttlebutt, to gain concessions from suppliers or otherwise throw their weight around, like you see a little more often with the big lower-end to medium-priced chains.
If Robb & Stucky were to close, would its business go to design firms? What would a liquidation sale do to so many high-end brands?
Robb & Stucky pushed a lot of volume at the high-end. The downstream effects of this filing could affect several high-end suppliers that still have domestic manufacturing.
Where does this leave the high-end? Is the customer still out there who wants to impress her neighbors with that $40,000 dining room table? Is this segment of the market as strong as it once was? How can it adapt?