Clothing retailer Brooklyn Industries—where we recently bought a very nice pair of slacks with purple pockets for a not unreasonable price—is in big trouble, according to an anonymous tipster who emailed us this morning to say, "Their sales are horrible. They are months behind on paying their bills and rent. They just went through a round of layoffs last week and yesterday. Rumor has it more cuts to come. Even though they just moved their headquarters to a snazzy office in Dumbo, they now have the space up for rent on craigslist. They are also being sued by their former business partner for over a million dollars. The irony is that they just won the Ernst and Young entreprenuer of the year award!"
Responding to our inquiry, spokesperson Judy McDermott says they're doing just fine, thank you, but did concede that the heat's been killing them.
Brooklyn Industries’ sales have been strong in 2010, but did suffer in July. It was the hottest July in years and store traffic decreased. The heat affected several other retailers in New York besides Brooklyn Industries as well. But we’ve already seen a bounce back in August and sales are strong.
We moved our headquarters office in June to a space in DUMBO so we could have better heating and technology bandwidth, as our prior office was old and could no longer accommodate our needs. We rented two offices in DUMBO, but soon realized that we don’t need both spaces; so we plan to rent the second space out in order to streamline operations and increase efficiencies. We will not be leaving our new DUMBO headquarters.
And CEO Lexy Funk says it's the heat AND the economy, which has, duh, impacted sales:
Sales were excellent January through June of this year, but in July it became apparent that the economy is still challenging. But we have already seen a bounce back in the past two weeks. Our Fall and Winter collections are amazing and we know our customers will love them. The truth is that retail has its ups and downs. We’ve seen sales dips before and have always recovered. We have nothing to hide - Brooklyn Industries is doing just fine.
Like many businesses faced with such a challenging market, we have looked for ways to scale back and conserve so that we can continue to deliver terrific product. In this effort, we decided in the last week to re-structure several departments. We did not do layoffs. Of the 170 people who work for us, we parted ways with three people. Two of those people, we asked to return as freelancers in the next several weeks, and to come back on board as we go into our busy Christmas season. We do not have plans to do layoffs. We work incredibly hard to build our internal teams, and we know how terrible it is to lose your job in this economy.
In regards to legal matters, I cannot comment further but to say that we do not have business partners, former or current. Myself and my husband started the business in 2000 and continue to run and own the company. We are married and not seeking legal action against each other.
So there you have it; the rumors you hadn't heard about a store you probably don't care about have been refuted by someone with a vested interest in denying them! We'll all sleep like rocks tonight.