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As The Retailer New York & Company Prepares To Close, The Last Vestiges Of Lerner Shops Fades Into History

There was a time when the country’s downtown retail districts consisted of three visible components: one or two local department stores, a host of variety stores, and a branch of Lerner Shops RTW ,Shops a popularly-priced nationwide chain of women’s and children’s apparel. Over the last two decades, Lerner Shops morphed into the New York & Company stores but now a Monday bankruptcy filing brings an end to a piece of American retail history.

On Monday, RTW Retailwinds, the parent company of New York & Company, Fashion to Figure, and Happy x Nature stores, filed for Chapter 11 bankruptcy protection. The firm cited the challenging brick-and-mortar retail environment combined with the effects of COVID-19 store closures as major factors impacting the decision.

RTW Retailwinds has been pushed into a state of organizational chaos. The retail company recently eliminated approximately 50% of its corporate workforce. In April, one half of its board of directors, including its CEO-elect, resigned. Its current merchandise stock, piled up within locations closed by COVID-19, has become outdated and declared “significantly impaired” by the company. RTW Retailwinds also missed two important July loan repayments towards its $40 million obligation with Wells Fargo. Monday’s bankruptcy filing was inevitable.

Liquidation sales have already started in the company’s stores and on its websites. Though it plans to close “a significant portion, if not all, of its brick-and-mortar stores,” RTW Retailwinds hopes it can find a buyer for its e-commerce business and intellectual property.

Lerner was founded in 1917 as a New York City blouse shop. By 1920, 23 Lerner Blouse Shops were in operation. Within ten years, that figure grew to 160 units in 37 states.

With its signature font and prominently-located storefronts, Lerner Shops became a retail staple of America’s downtowns. Lerner spared no expense when it came to store architecture and design. The buildings were often sleek and stylish. Its company-wide revolutionary interior design features included soft indirect lighting, pastel colors, spacious floors, and air conditioning.

One of Lerner’s signature design features was its plate glass display windows. Known internally as the “Lerner Visible System,” the prominent floor-to-ceiling glass windows helped enhance the merchandise’s appearance and capture shopper’s attention. 

Lerner often sought out locations that were adjacent to major downtown department stores or at some of downtown’s busiest intersections. The real estate usually came at a high price and the retailer often signed lengthy lease agreements.

By its 50th anniversary in 1967, Lerner was able to cite many notable accomplishments. The apparel retailer was one of the first national chains to expand into shopping centers, one of the first to use computers and other data processing equipments. Since the company’s founding, Lerner Shops enjoyed fifty straight years of profitability.

The company based its success on two business practices; an emphasis on value and the ability to offer customers the latest designer-inspired fashions simultaneously at its nationwide network of stores.

As many downtown stores relocated to shopping malls Lerner maintained many of its of downtown locations. Many of the company’s leases had been negotiated decades earlier and Lerner honored the terms. However, as downtowns emptied and deteriorated, the once-stylish Lerner Shops stores often appeared dowdy and dated.

When Limited Brands purchased Lerner in 1985, it breathed new life into the stodgy apparel store. The Lerner name still had strong name recognition but its clothing line had cheapened in style and quality. Owned by Les Wexner, Limited Brands, was the parent company of The Limited, Henri Bendel, Victoria’s Secret, and Lane Bryant. Wexner reexamined the Lerner store’s image and updated its merchandise mix. His changes returned Lerner to profitability for the first time in several years.

In 1998 Lerner introduced New York & Company as a clothing brand back. The line was designed to emphasize the style and color of New York City fashions. Over the next six years, the Lerner name was gradually phased out and replaced by New York & Company on its storefronts. The once-popular Lerner name lost its cache.

By the early 1990s, many faded downtown districts consisted of nothing more than Lerner and Woolworth as its sole large retail anchors. But as its leases expired and locations closed, the Lerner Stores signature script logo remained on its stores for years long after they shuttered.

Limited Brands sold New York & Company to a group of investors back in November 2002. NY&C became a popular shopping mall staple along with stores such as Claire’s, Forever 21, and Zales. All three are still prominently featured in today’s shopping malls but are also trying to navigate their own way through bankruptcy court filings.

It comes as no surprise that New York & Company, and its parent firm, are calling it quits. Though it stoically stood in America’s downtowns for decades, Lerner Shops followed the lead of other nationally-known retailers and eventually closed up shop. Unfortunately, New York & Company now faces the same pattern within a shopping mall environment.

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