Henrico-based S&K Famous Brands closing 58 retail stores

S&K Famous Brands Inc. is closing 30 percent of its 196 stores and has put its West Broad Street headquarters up for sale as it works to restructure its store base and operations.

The Henrico County-based men's clothier would not say how many store employees would lose their jobs.

"This is the toughest retail environment I've seen in 20 years," said President and CEO Joseph A. Oliver.

Oliver said yesterday that the moves were designed to streamline the company as it works to reach new customers and improve weak sales.

The store closings began this month and will continue until the end of the January, said Brian Kipp, vice president of marketing for the chain.

In all, S&K will close 58 underperforming stores, leaving 138 in operation.

Four of its 28 Virginia stores, including one at Virginia Center Commons, will close. The others that are closing are in Roanoke, Norfolk and one of two stores at Potomac Mills Mall.

The chain is not leaving any of its markets.

S&K's corporate headquarters complex is for sale. The properties, which include a store, the two-story headquarters building and a 110,000-square-foot distribution center, are listed with Thalhimer/Cushman & Wakefield and CB Richard Ellis. No sale price was available.

Henrico's Real Estate Assessment Division values the properties at $7.5 million.

Oliver insists that the company is not selling the headquarters out of desperation, but as a way to maximize space.

"This isn't a 30-day fire sale," he said. "We saw that we had a lot more space than we needed."

The company has about 90 employees at its corporate office, and about 200 in the Richmond area, including at its six stores.

If the property is sold, the company will move to a smaller location somewhere in the area.

Oliver said the sale and closings are part of a larger restructuring.

"We're not the same S&K we were a few years ago," he said.

As part of its effort to increase market share and attract customers, the chain has begun carrying sportswear, jeans, and lines by designers Kenneth Cole and Michael Kors.

To cut costs in July, it laid off about 50 workers from its headquarters operation. The move was expected to save S&K about $3.3 million per year. S&K said severance expenses for the laid-off employees will be charged to the fiscal third quarter, which ended Nov. 1, but it did not estimate an amount.

Oliver said his No. 1 priority is to avoid further layoffs.

That's a difficult proposition given the state of the economy.

The Commerce Department reported that in October retail sales decreased 3.3 percent compared with October 2007, and sales at clothing stores fell 3 percent during the same period.

November sales numbers are due today and many experts predict the drops will continue.
Contact Louis Llovio at (804) 649-6348 or .