What once was Wilsons the Leather Experts Inc. unloaded some of its prized assets amid plunging sales and changed its name to PreVu Inc.
Wilsons the Leather Experts, once a dominant retailer of leather clothing popular in the 1980s, has seen fashions and fortunes shift — as this closed store in Burnsville Center shows. On Tuesday, the chain sold most of its assets to a clothing company that will change its name and identity.
Wilsons the Leather Experts Inc., once a dominant seller of leather clothing, is rapidly shrinking into oblivion.
The beleaguered chain has closed about half its stores over the past year. Its chief executive resigned in April. Its stock is trading at 10 cents a share and faces a possible Nasdaq delisting. And now, the company doesn't even own its own name and website.
The Brooklyn Park-based retailer on Tuesday said it sold the Wilsons name, 116 outlet stores and its online retail assets to G-III Apparel Group Ltd. of New York for $22.3 million in cash. The fate of Wilsons' 100 remaining, mall-based stores and 14 airport stores remains unclear as the retailer moves to cut costs amid rapidly declining sales of its leather clothing and accessories.
The company, which did not respond to requests for comment, said in a press release that the sale is part of its plan to obtain capital and use it to launch a new mall accessories store concept. Wilsons said Tuesday it changed its name to PreVu Inc.
Wilsons had experimented with an accessories boutique called "Studio" at Southdale Center in Edina, but Tuesday, a manager at the Southdale store said all of the mall-based stores will be renamed PreVu.
For now, G-III Apparel will operate the outlet stores under the Wilsons name, but that may change within the next two years, said Wayne Miller, chief operating officer of G-III.
Some of the Wilsons outlet stores may be converted to outlets of Andrew Marc, a subsidiary of G-III that supplies more upscale leather clothing and accessories to chains such as Saks, Neiman Marcus and Lord & Taylor.
"We've seen what's gone right and what's gone wrong" at Wilsons, said Miller. "With the right product, those stores can be successful."
The asset sale is a dramatic turnaround for Wilsons, which was founded in 1899 as Berman Brothers Fur, Wool and Hides and was once the largest retailer of leather coats and accessories in the United States. But the company struggled amid a ruinous price battle with discounters, and several attempts to reinvent itself have failed to rejuvenate sales.
At its peak in 2001, the company had 618 stores and annual sales of more than $600 million. As of May 3, the company operated just 228 stores, and last year, it posted a net loss of $77.5 million.
Recently, Wilsons' outlet stores have fared better than its mall locations. During the first three months of the year, sales declined 27.1 percent at Wilsons' mall stores open at least a year (a key retail measure known as same-store sales), while sales at Wilsons' outlet stores fell just 1.4 percent. Wilsons' 14 airport stores gained 8.3 percent in the same period.
Wilsons' independent accounting firm said it has "substantial doubt" about the company's ability to stay in business, according to its annual report filed with the Securities and Exchange Commission. Wilsons had $9.3 million in cash as of May 3, compared with $45.6 million in early 2006.
G-III said it has hired former Wilsons CEO Joel Waller, who spent nearly three decades with the retailer, to run the outlet stores. G-III will rehire more than 900 people at Wilsons' headquarters in Brooklyn Park.
The deal was announced after the stock market closed, and shares of G-III rose 7 percent, to $13.17, in after-market trading.
Chris Serres • 612-673-4308