Alcott & Andrews Closing Costa Mesa Store, 7 Others

Alcott & Andrews, the classy New York-based women’s clothier, is closing eight of its 13 specialty stores, including its only Southern California store at South Coast Plaza, a company spokesman confirmed Friday.

With the closures, Alcott & Andrews--once one of the fastest-growing specialty chains in retail--will become strictly an East Coast regional chain.

All three of the California stores--in Costa Mesa, San Francisco and Palo Alto--are on the list of those that will close when their stock of merchandise is sold, said company spokesman Stan Bratskeir. Others targeted for closure are the stores in Hartford, Conn.; Rockville, Md.; Chicago and Atlanta. A store in Oakbrook, Ill., shut its doors about a week ago.

That will leave Alcott & Andrews with two stores in Manhattan, one in Washington and one in Stamford, Conn., Bratskeir said.

Alcott & Andrews opened its Costa Mesa store almost three years ago with a great deal of fanfare, including a three-week television blitz. There were more than 100 spots featuring two navy-blazered actresses, “Alcott” and “Andrews,” who quickly became the Bartles & James of the rag trade. The store’s demise is a blow to South Coast Plaza’s Crystal Court annex, which has long suffered from sparse traffic.

The Alcott & Andrews concept was to sell a complete line of work and leisure clothing to career women ages 25 to 50 who earn at least $50,000 per year. The chain, started by two Federated Department Store executives, became highly visible because of its new concept and its big-name investors, who reportedly hold 75% of the company.

The company’s major investors included Herbert and Melvin Simon, the principals of Melvin Simon & Associates, the large shopping-center builders. J.C. Penney Co. Inc. bought a 20% interest in November, 1985. Other outside investors are John Pomerantz, the chairman of Leslie Fay Inc., and Harold Geneen, the former chairman of the ITT Corp.

Bratskeir said the 5-year-old chain ran into trouble because it is highly leveraged. Instead of being able to open new stores and promote businesses, he said, most of the privately owned firm’s cash was used to service debt.

“The debt structure has been extremely onerous,” said Bratskeir, who declined to elaborate. “Rather than continue in a direction that’s not productive, Alcott & Andrews is retrenching.”

While some of Alcott & Andrews’ individual stores were profitable, the chain has recorded losses in three of its four fiscal years, industry sources said. Bratskeir said the company reported operating profits in every year but one.

The chain has annual revenues of about $50 million, according to Women’s Wear Daily, a trade publication.

Alcott & Andrews has been up for sale since June, 1988. Bratskeir said negotiations are under way for a capital infusion from an unnamed, outside source. He said an announcement on the deal should be made by Tuesday.

Meanwhile, the scene was chaotic Friday at the 11,000-square-foot store in the Crystal Court annex of South Coast Plaza.

Virtually all merchandise at the Costa Mesa store had been cleared out of the entire second floor, where boxes of hangers littered aisles. Posters touted discounts of up to 70% on cashmere sweaters and wool jackets, while a hand-lettered sign stated, “All sales are final.”

The store’s luxurious antique furnishings were removed a few weeks ago--shortly after the chain’s headquarters took back current merchandise from the Costa Mesa store and replaced it with clearance goods.

Earlier Friday, store general manager Robert Tate said he had not been officially notified that the store will close. “There’s been talk, but we know nothing,” he said.

Last year, the store began a costly promotional program, bringing in celebrities, including ABC news personality Barbara Walters, to help boost business. But the crowds never materialized.

“I never saw anybody over there,” said Betsy Brower, manager of the nearby Talbot’s store. “Unfortunately, (the store) attracted mostly an East Coast customer, a very traditional career customer,” who is not necessarily an Orange County shopper, Brower said.

Several industry analysts contacted Friday agreed one problem was that the Alcott & Andrews concept is ahead of its time.

“Would Barney’s (a New York retailer catering largely to men) be able to do this sort of business if there were a limited number of men in top management positions?” said Al McCready, a partner with Deloitte Haskins & Sells in New York. “The life of women’s professional clothing is one or two seasons,” and that makes women less inclined to spend hundreds if dollars for a suit, McCready said.

Other retail experts said the size of the chain’s stores--some as big as 15,000 square feet--have been a problem.

“If they had opened smaller units and had more of them in more places, they may have gotten a critical mass faster,” said Walter K. Levy, chairman of Walter K. Levy Associates, a New York marketing and executive-search consultant firm.