Short Pump U

Another for-profit private university is cropping up in Short Pump.

Stratford University signed a lease for 52,020 square feet at the former S&K Menswear headquarters at 11100 West Broad St.

The new school becomes a cross-Broad Street rival to South University, a new entrant to the market that is heavily promoting/ advertising its college classes.

Jeffery Bisger, president of TGM Realty Investors, the development arm of Thalhimer Commercial Real Estate, said the former warehouse will be converted into classrooms and offices.

Bisger said the school will tear down about a third of the 75,000-square-foot building to make room for more parking and put a facade on the front. The cost to remodel will run between $3 million and $3.5 million, he said. Thalhimer and Stratford are sharing the costs.

“They were looking around for sites, and they were brought to us through an out-of-town marketer. They liked the location and liked what we planned to do with the property,” Bisger said.

Last year, while S&K Menswear was in bankruptcy, Thalhimer purchased the headquarters property for $5.6 million, which included the warehouse, corporate offices and retail store. Read more

S&K to auction customer list, other IP

Streambank is coming to Richmond again to sell off the intellectual properties of a defunct retailer.

The Massachusetts-based advisory firm helped Circuit City sell its intellectual property (trademarks, customers data, etc.) and will sell those same assets for S&K Menswear, which filed for bankruptcy protection in February.

The deadline for bids is Nov. 6.

Perhaps most valuable will be the company’s database of more than 2.5 million customers, which likely includes email lists. (If that’s an accurate number, it means roughly 0.8 percent of the U.S. population shopped at S&K at one point.)

Streambank said in a news release that it has found one buyer, the Buxbaum Group, which could pay $165,000 for the entire lot, which also includes house brands and the name S&K Menswear. That would be less than 10 cents per contact.

At its peak, S&K operated more than 230 stores in 27 states. The company was slowly losing market share when the recession hit, and then it had trouble getting financing to buy enough product for the stores.

The company’s former headquarters in Short Pump is still for sale.

Startup sprouts from S&K ruins

And from the ashes, new life emerges.

Sounds biblical, but in this case it applies to three entrepreneurs who have a plan to sell low-priced menswear online.

Bert Hardy and two other former S&K Menswear executives are trying to take the S&K model and cut out the stores, leaving a profitable online operation.

They first tossed around the idea six months ago while helping S&K wind down. Read more

Former S&K chief suited for new job

The former chief executive of S&K Menswear has found a new home as the president of locally-based RetailData Services.

The company collects information about supermarkets and sells it to the grocery industry.  Oliver said he wanted to stay in retail and had known about the company for a decade.

“So much of what you see right now is downsizing or cost cutting. The owners [of RetailData] are really investing in the business right now and adding new divisions and bringing in new people,” Oliver said.

Oliver, a California native, moved to Richmond more than a decade ago and started working at Davenport & Co. He took over as chief executive of S&K Menswear in 2006 and was unable to turn around the company in time to save it from bankruptcy. Read more

Day one at S&K’s GOB sale

And now come the bargain hunters.

At 1:30 Thursday, around 15 to 20 shoppers cruised through S&K Menswear on Broad Street looking for bargains. Most left the store with several items on first day of the chain’s going out of business sale. Read more

S&K To Liquidate

Another Richmond-based retailer will be winding down in the unglamorous fashion of a going-out-of-business sale.

Just like Circuit City before it, at the end of its corporate life no other company was interested in buying S&K Famous Menswear and trying to turn it around. Not even Stuart Siegel, the son of the founder who owned 15 percent of the company when it filed for Chapter 11 bankruptcy protection in early February.

Discussions with possible investors and local banks did not materialize, according to former chief executive Joseph Oliver, and suppliers were getting nervous and less willing to provide clothes on credit.

The company was founded in 1967 by two brothers who found a niche selling quality men’s clothes at a good price, but that niche evaporated as fewer men bought suits and the lower-end marketplace became more cutthroat, according to Oliver (more from him below). The company’s profitability peaked in 1999, Oliver said.

On Wednesday, Bankruptcy Judge Kevin Huennekens approved S&K Famous Brands Inc.’s plan to sell its assets to Gordon Brothers Retail Group, which will start liquidating the remaining merchandise from the 105 stores and headquarters as early as this week. Gordon Brothers guaranteed paying the bankruptcy estate $7.9 million and will keep 24.8 percent of the proceeds for itself. (Click here to see a video of what the liquidation of a headquarters looks like.)

S&K had more than 200 stores and 1,000 employees across the nation a few years ago, but profits fell from about $3 million in 2007 to a loss of $4 million in 2008.

The closure will ripple through Richmond . S&K used a local marketing firm to design and plan its ad campaign, and the company had four local stores.  Landlords at the locations – on Broad Street next to the headquarters, at Virginia Center Commons, on Midlothian Turnpike and across from Brandermill, with one more in Hopewell – be left with another gaping vacancy at a time when there are few new tenants. And the company supported local charities.

Jonathan M. Tibus, the chief restructuring officer who was essentially running the company, could not be reached for comment.

Hilco Merchant Resources got paid $150,000 for trying to find a buyer.

Late yesterday BizSense chatted with Joe Oliver, who was chief executive from May 2007 until April 9, when he was asked to leave by the board of directors. (You can watch him give a company pep talk here.) Before that, he was a director of mergers and acquisitions at Davenport & Company. Below is an edited transcript of a conversation with him.

Richmond BizSense: It didn’t seem from the Chapter 11 filing that S&K was in as bad a shape as Circuit City. Why couldn’t things be turned around?

Joe Oliver: We did everything we could to get the debt paid off. Usually you can raise new financing to get yourself out of bankruptcy. We were talking to a number of investors and local banks.

RBS: To be sure, this is a tough time to be in retail, but some chains are doing okay, and you guys were in the lower-priced bracket. Wouldn’t that be a good place instead of selling premium suits?

JO: We had negative comp sales for three years. We were closing a number of stores to raise money, but it’s tough to catch up. And then vendors stopped giving merchandise. We had no money to pay expenses, and it’s hard to recover from that.

RBS: So what would you say was the biggest problem?

JO: The suit business isn’t a good one. We were moving aggressively to add casual clothing. And tuxedo rentals were huge. But we couldn’t grow those fast enough to make up for declining revenue in suits.

RBS: Jos. A. Bank seems to be doing okay.

JO: They began trading up real estate in the late 1990s and moving into branded sportswear. A lot of their success comes from a quality product, and they convey it to customers. Being a discount message [like S&K] in a bad economy is a tough one. Then we were competing with Target and Coles. And if you’re trying to match those guys on price, that makes for a tough equation.

RBS: Why didn’t any of the big owners or board of directors step up and buy the company?

JO: That’s a good question to ask.

RBS: What are some of your regrets?

JO: I loved the S&K employees, and I feel sorry for them. In a bankruptcy, it’s the employees who get the short end of the stick. I’ll be okay, but they may have a hard time finding jobs.

RBS: Is this the worst of the recession?

JO: I think we’re about a third of the way through the retail shakeout. We are not done with bankruptcies and consolidations.

RBS: Should anyone in BizSense Nation be needing a suit, what sort of deals might they expect?

JO: There will be some good bargains. Maybe 30 percent to 40 percent off.

Aaron Kremer is the BizSense editor. Please send story tips to Editor@richmondbizsense.com.

More empty stores at area malls

Dozens more retailers have disappeared from local malls in the past six months.

About 15 percent of the storefronts in Richmond’s six largest malls are vacant. And although that’s lousy news for landlords, tenants are using the recession to ask for rent reductions, even on existing leases. Read more

S&K Menswear files Chapter 11 Bankruptcy

Richmond-based men’s clothier  S&K Famous Brands, Inc has filed for Chapter 11 Bankruptcy Protection in an effort to get out of leases, trim costs, and prevent further erosion of vendor confidence.

The company lists assets of $41,440,100 and debts of $35,499,000 (not including operating leases). There will be a hearing at 2:00 today in Richmond. Read more

CFO and CAO leave S&K

Long-time S&K Menswear CFO Bob Knowles has left the company. Controller and Senior Vice President & Chief Accounting Officer Janet L. Jorgensen has also left the company.

Knowles was with the company for more than 25 years.

S&K announced last week that it was cutting 50 local jobs. CEO Joseph Oliver could not be reached for comment. Read more