Mark Shale in financial trouble again?
Chicago retailer Mark Shale may be in financial trouble again. The three-store chain, which is more than half menswear, has reportedly put most of its buying and marketing staff on furlough.
A source close to Mark Shale said that the furloughs began in mid-July, and that VP of merchandising and marketing Allyson Lewis and president Rich Myers are still working. Neither Myers nor Lewis could be reached for comment. All three stores remain open with product, and await fall deliveries.
CEO Scott Baskin retired in July last year and president Rich Myers took over running the retailer.
“Business is strong,” the source said. “I think it had more to do with things that aren’t directly related to the store. The men’s business is doing quite well. As far as I know, all the vendors are hoping for the best, standing by and waiting to see what happens.”
The retailer launched a new website, but possible signs of trouble started last fall when the new women’s creative director, Maria Pinto, quit after just seven months. Mark Shale hired Pinto, a women’s wear designer best known for outfitting First Lady Michelle Obama and Oprah Winfrey in February, 2011. Some sources say that it may be Mark Shale’s women’s wear business (40 percent of the total) that are weighing it down now.
Mark Shale, which was founded in 1929 by Al Baskin in Joliet, Ill., has had a turbulent history. Until the 70s, the Baskin family ran the business as Al Baskin Store for Men. When the family changed the store name to Mark Shale, they began expanding in Chicago and then across the country. Through that expansion, there was also some contraction. But the first big trouble hit in 1995 when the retailer filed for bankruptcy, closing five of its 13 doors.
After what then CEO Scott Baskin said was 14 profitable years, Mark Shale suffered heavy damage in the most recent recession, filing chapter 11 again in March, 2009. It was forced to close five of its eight stores in Atlanta, Dallas, Kansas City, St. Louis and its Chicago outlet store.
“We just got caught in the tsunami of this economy,” Baskin said in 2009. “Our core customer, who has seen his net worth plummet, has stopped buying. We figured out how to deal with 30 percent less revenue but we could not figure out how to deal with 40 and 50 percent less revenue in such a short period.”
But in June, 2009, Mark Shale got $2 million debtor-in-possession financing from a Chicago private equity group called JOB Investments LLC. Cash-raising sales enabled the retailer to pay down most of the $5.2 million it owed its bank.
