New York & Company, one of the largest Omnichannel women’s specialty retailers offering exclusive celebrity and sub-brand collections, has announced the official launch of its corporate reinvention to a multi-brand lifestyle platform.
The company’s vision is to be the premier incubator of lifestyle brands by leveraging the company’s expertise in celebrity, design, customer, e-commerce, operations, real estate, and inventory optimization to identify accretive brand and profit opportunities.
The company’s multi-brand lifestyle platform will accelerate growth of the New York & Company brand through ongoing celebrity partnerships, including collaborations with Eva Mendes, Gabrielle Union and Kate Hudson, while also expanding the recently acquired plus-size brand, Fashion to Figure, as well as introducing several new brands, including a lingerie lifestyle brand and the Kate Hudson Collection that leverage the company’s design capabilities, digital platform, and operational expertise.
As part of the transformation, the company will be changing its name to RTW Retailwinds, reflecting the ability to grow the portfolio of lifestyle brands into new categories and markets.
Commenting on the announcement, Greg Scott, Chief Executive Officer stated: “We are at a defining moment in our corporate reinvention, with a proven track record for developing celebrity and sub-brand collections that resonate with our consumers. New York & Company is one of the largest specialty women’s retailers, with approximately 165 million annual visits and a combined social reach of over 30 million followers across our celebrity partners and we are leveraging our expertise to accelerate sales and profitability across our multi-brand lifestyle platform, expanding the core New York & Company brand while also incubating new brands that are accretive to the portfolio. Our goal is to drive sales to well over US$1 billion and double digit EBITDA margins. We look forward to sharing the full vision and strategy for the Company during our investor day being held tomorrow at our Company headquarters. Over the past several years, we developed and implemented the necessary framework to take our Company to a new level of growth,”
Scott continued. “Today, over 30 percent of our sales are generated digitally, we have optimized our retail footprint, and have the talent and infrastructure to capitalize on our strengths. In fact, with the second quarter of 2018, we reported our fourth consecutive quarter of comparable store sales growth, our highest gross margin rate achieved in the second quarter since 2005, and are on track to achieve adjusted EBITDA of US$35 million to US$37 million for the fiscal year, up from adjusted EBITDA of US$30.5 million in fiscal year 2017.”
John Howard, Co-Managing Partner of Irving Place Capital and member of the New York & Company Board of Directors stated: “I am extremely proud of the New York & Company team’s ability to transform the business to be aligned with how consumers connect with brands today. RTW Retailwinds moves forward with a strengthened operating model that leverages design capabilities, sourcing expertise, digital platform, and operational foundation that will incubate new brands with a significant digital presence and strong loyalty base and deliver long term profitability. I look forward to continuing to assist the company to achieve its goals as a board member and a shareholder.”
Create a Multibrand Platform. Unlock and amplify lifestyle, category, and customer opportunities that demonstrate market potential, competitive whitespace, and are sales and profit accretive.
– Grow New York & Company to over US$1 billion in annual sales. Expand celebrity collections, drive fashion and versatility through sub-brands, and introduce new categories while expanding gross margins through pricing and promotions initiatives, strategic sourcing capabilities, and enhanced inventory optimization.
– Expand Plus-size Brand, Fashion To Figure – Plus-size market represents US$21 billion opportunity growing at twice the rate of the overall apparel market. With Fashion to Figure, the company expands into the plus-size market and will leverage its competitive assets of speed, fashion, value and community as critical points of differentiation while also amplifying the brand’s awareness and emotional connection through celebrity partnerships.
– Introduce Kate Hudson Collection, available across multiple points of distribution, including standalone digital site and New York & Company eCommerce marketplace. The Kate Hudson Collection will be a casual lifestyle brand anchored in denim with the potential to grow across multiple distribution channels.
– Introduce lingerie lifestyle Brand – Represents US$16 billion market opportunity across bras, panties, sleepwear, and shapewear. Identified whitespace opportunity offering a full selection of lingerie lifestyle products through a standalone digital site that balance fashion with fit, function with comfort, amplified with a celebrity partner and authentic cause platform.
Leverage Customer Database and Loyalty Program. The company’s ability to incubate new brands is further substantiated by New York & Company’s physical footprint of 425 stores, a digital presence which represented 30 percent of 2017 sales, a customer file with over 13 million names, and approximately 165 million annual visits online and in stores. The company’s loyalty member base represents 43 percent of total sales with its members providing a runway for growth for each of its digital brands. The New York & Company e-commerce marketplace provides a channel to build brand awareness, and the company’s loyalty program can be further leveraged across the platform to increase lifetime value.
Drive Customer Value through Data Analytics. Leverage recently implemented analytical capabilities to drive customer engagement and retention while leaning into consumer insights and testing to substantiate competitive whitespace opportunities.
Grow Celebrity Lifestyle Brands. The company has a proven track record of growing lifestyle celebrity brands which have a demonstrated ability to further deepen its connection with customers, substantiated by research validating awareness, influence, and style credibility. The company’s celebrities speak deeply to distinct demographics with broad appeal that can power a brand, amplified with a combined social reach of over 30 million followers across our celebrity partners.
Capitalize on Digital Capabilities. The company’s investments in technology over the past several years and its strong digital business provides a digital platform that can be replicated to support a portfolio of brands with enhanced inventory optimization.
Create Sourcing Synergies. The company’s vast supply chain and logistics capabilities provide scaling opportunities to reduce fabric and production costs associated with brand development while also expanding speed to market through fast track concept to customer chase capabilities.
Benefit from Real Estate Agility. The company benefits from a highly flexible real estate portfolio, with 70 percent of store leases could be terminated by the company in 2 years or less. Additionally, the company’s demonstrated ability to identify and open new stores with short term leases in attractive locations presents an opportunity for new brands to build brand awareness and customer acquisition.
Maintain Financial Flexibility. The company ended the second quarter of 2018 with approximately US$ 95 million in cash on-hand and no debt providing strong financial flexibility to execute its plans and continue to drive positive cash flow.