S&K Menswear took another step toward extinction this week when it inked a deal with liquidation firm Hilco Merchant Resources to sell the firm for at least $7.9 million. Hilco has the option to keep S&K running, but I think that is unlikely. If you’re going to keep the company going, you don’t sell to Hilco, who is best known for liquidating the likes of The Sharper Image and The Bombay Company.
While Hilco has the option of continuing to operate any or all of the approximately 100 stores that are left in the chain, Hilco hasn’t elected to continue operating any of the 30 stores they were handed in February and are in the process of liquidating. To keep S&K running as a going concern, the company must file a new sales plan with the court by this Friday, 5/15.
Here’s an image that I can’t get out of my head: I’m in the gym watching the local news on the big TV, and on the screen appears a gaunt and pale Joe Oliver. He is wearing a bizarre looking shirt and vest combination that I wouldn’t wear on a dare. I couldn’t hear what he was saying, but I was thinking, here is the president of a company that built its brand on business suits, modeling an outfit that is totally out of sync with its core customer. I thought, “What is he wearing?!”
In my opinion, S&K got crushed by a perfect storm of a horrible economy, changing workplace fashion and an inability to reinvent itself. Being unwilling or unable to change a failing business model will never end well.
UPDATE: During a hearing on Tuesday in bankruptcy court, S&K indicated it could run out of money by the middle of June, as it has less than $1 million in cash on hand. The company’s chief restructuring officer, Jonathan Tibus, says the stores are also running out of inventory. Look for a liquidation sale to start by Memorial Day.