NEW YORK, United States — Forty Five Ten, the concept store once heralded as the Neiman Marcus for a new generation, is in retail limbo after closing its stores and laying off all but a handful of employees.
The company is down to a skeleton crew of about five employees, from nearly 100 before the pandemic, BoF has learned. President and Chief Creative Officer Kristen Cole, who ran the business for parent Headington Companies LLC, was among the layoffs. All five of its stores, including two in Dallas, where lockdowns were lifted more than three weeks ago, remain closed. Online sales are suspended on its website and through Farfetch.
It’s an abrupt reversal of fortune for the lauded specialty store, founded by Brian Bolke and Shelly Musselman in Dallas in 2000. Forty Five Ten was in the middle of an ambitious expansion under Tim Headington, the oil and gas billionaire and real estate developer whose firm acquired the retailer from Bolke in 2014. The Headington era kicked off with the opening of the 37,000 square-foot flagship in a downtown Dallas building owned by Headington. A sprawling outpost inside the new Hudson Yards mall in New York made for a glitzy addition to the brand.
But the pandemic pushed Forty Five Ten to the brink, as it has many of its retail peers. On top of the lockdowns and plunging consumer spending, Forty Five Ten could add crashing oil prices to its list of problems. The plunge, which briefly sent the value of Texas crude into negative territory in April, has sparked a wave of layoffs and bankruptcies across the energy sector and robbed the state’s high-end retailers of some of their best customers.
“We were really poised to be a big player … everything has changed now,” Cole told BoF, adding that she was removed from strategic decision-making after she was furloughed in March.
Headington Companies declined to comment through a representative. The company is not alone in laying off employees during the pandemic. However, its decision to shut down online sales and keep its stores closed after lockdowns are lifted is unusual.
Forty Five Ten’s recent troubles illustrate the difficulty of making the leap from a regional specialty boutique defined by a founder’s personal touch to a national chain competing for sales with the likes of its Dallas neighbour, Neiman Marcus.
Under Bolke and Musselman’s leadership (the latter died in 2011), Forty Five Ten developed an international reputation as a sort of Texan Colette, known for its elevated and unexpected mix of designers, offering labels otherwise inaccessible to wealthy Dallas shoppers.
“The concept of specialty retailers has always been, when it’s successful, about an owner or a proprietor that had a very specific point of view,” said consultant Robert Burke. “It’s a very personal business and a very personal selection of merchandise and on top of that.... It is, in many ways, the antithesis of the department store experience.”
Bolke exited the business in 2017, and since then Forty Five Ten has expanded to include smaller outposts in Napa Valley and Aspen. The expansion faced bumps along the way: a Houston location closed in 2018 after only two years, and a smaller space in Miami closed at the beginning of 2020. Cole was appointed head of the business in 2018 after Headington acquired her store concept Tenoversix.
Its biggest bet on expansion came last year with the four-part 16,000-square-foot location inside New York’s Hudson Yards, the $2 billion retail venture at the centre of a new mixed-use neighbourhood on the west side of Manhattan. The shop marked the retailer’s biggest foray out of Texas, with the hopes of exposing it to a new audience of wealthy New Yorkers and international tourists.
That bet had yet to pay off, even before Covid-19. Hudson Yards was a controversial addition to the city’s shopping landscape, facing scrutiny for its use of tax loopholes during construction and developer Related Cos.’ ties to the Trump administration.
Former Forty Five Ten employees told BoF that traffic was slow on the mall’s fifth floor, where its four stores were situated. The shops’ sales never matched the Dallas locations, where associates had lucrative relationships with wealthy client’s personal shoppers and stylists. At the end of 2019, Forty Five Ten laid off some employees at the Hudson Yards location, including the head of the store and security and operational staff.
“We planned a massive business in Hudson Yards… and the traffic did not live up to the projections,” said Ann Wehren, Forty Five Ten’s former fashion buying director.
Hudson Yards saw an initial jump of traffic after launch, according to data from foot traffic analytics platform Placer.ai, before settling into more standard seasonal mall traffic patterns: summer and holiday spikes and fewer visitors in the winter months. The mall shut down in March due to lockdown measures from Covid-19 and has not announced a reopening date.
A spokesperson for Related Companies said the Shops at Hudson Yards welcomed 20 million people in 2019.
Forty Five Ten was in the middle of retrenching when the pandemic hit. The company was unprofitable and had exited the men’s business as of the Autumn 2020 season, former employees told BoF.
Now the only remaining employees on Forty Five Ten’s payroll include accounting and operational staff, as well as at least one Dallas sales associate offering customers private discounted sales.
The retailer faces an uncertain future, particularly at Hudson Yards. Shoppers have been slow to return to indoor shopping centres in other parts of the country where lockdowns were lifted. And the mall’s anchor tenant, Neiman Marcus, filed for bankruptcy in May.
At the same time, the challenges continue for fashion’s multi-brand retailers, online and off, which are trying to sell extra spring inventory to anxious shoppers. The next months will likely bring deep discounting that will further eat into the thin margins of stores and the labels they sell.
Cole, who is consulting for fashion brands since leaving Forty Five Ten, said she hopes to return to retail again, but with a smaller store footprint.
“I had a really strong team and really great clients and I am using this time to think about new concepts,” she said. “I think we all know how broken the fashion system is.”