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.
COVID-19 Economy FAQs
New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?
Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
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