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
So what’s up with “Zoom fatigue”?
It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.
How are Americans spending their money these days?
Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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