As retail industry melts down, lingerie company Natori confronts a threat
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In early March, Ken Natori, president of the lingerie and loungewear company Natori, sat down with his team for an emergency meeting.
“We came up with, like, an absolute worst-case sales scenario for the entire year,” he said.
They predicted a 30% to 40% drop in sales. Now, that looks optimistic.
“It’s been pretty much a disaster,” he said.
Natori was founded by Ken’s parents in the late 1970s. At the time, Ken’s mom, Josie, who grew up in the Philippines, was an executive at Merrill Lynch, but she really wanted to start her own business. She and Ken’s dad, also named Ken, thought about franchising a McDonald’s or opening a car wash.
“And then ultimately what happened was, one of her friends from the Philippines sent her some peasant blouses, which is kind of a, you know, native garb in the Philippines,” Ken said. “My mother had the wherewithal to cold call a buyer at Bloomingdale’s, and the buyer for some reason accepted her meeting.”
The buyer told her: If you lengthen the sleeves, we might be able to sell these in our sleepwear department. That was the beginning of Natori.
Josie is 73 now and she’s the CEO and chief creative officer at the company, which is known for its high-end lingerie and sleepwear — bras, pajamas, robes and kimonos.
Natori still does most of its business with department stores like Bloomingdale’s, Nordstrom and Neiman Marcus, which is reportedly preparing for a bankruptcy filing. (Neiman Marcus declined to comment.) All of these department store chains are currently closed.
“So they have not just pushed out but canceled, you know, most orders, certainly for April and May. Some are going as far out into June,” Ken said. “So that’s basically shut off our main source of revenue.”
Sales on Natori’s website have jumped since the pandemic started. But it’s a drop in the bucket.
“The math still doesn’t come close to working out,” he said. “We’re still mostly a wholesale business.
Now the company is discounting its products online, 25% off or more, and applying for small business loans. It has also let people go. Natori has less than 200 employees; some have been with the company for decades.
“That’s been the hardest part,” he said. “We’ve had to temporarily lay off almost half of the company, because of, you know, the extremely dramatic conditions we’re in. And, yeah, it’s not, it’s not easy.”
It’s not easy for him or his mom to think about worst-case scenarios for the business, either.
“She has spent 43 years starting this business from scratch and running it to what it is today,” he said. “I’ve spent the last 13 supporting her and building what we thought was, you know, the next wave of the company.”
They have a plan to get through this, Ken said. But there’s a lot they can’t control — like how long the shutdowns will last and whether customers will come back to stores when this is all over.
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