Intermix ‘Exploring Options’ to Deal With Financial Woes
Financial trouble appears to be brewing at Intermix, the 30-unit multibrand specialty chain.
According to sources, the company is weighing options in light of its over-inventoried position, a slowdown in sales, improperly budgeting for overall expenses, and a highly competitive and challenging retail environment. WWD has learned that Intermix has paused all payments to vendors. Sources said Intermix plans to restructure the company, but would not be filing Chapter 11.
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A spokesperson for the retailer said Monday, “Intermix is exploring several options to navigate the challenging retail and economic environment in an effort to strengthen the company’s long-term position. The company is confident in its path forward.”
Intermix’s transition to a stand-alone company after being owned by The Gap Inc. has been difficult and the retailer is apparently trying to figure it out, said sources.
As reported last week, Karen Katz, the interim chief executive officer, stepped down and was succeeded immediately by James Rushing, the interim chief financial officer, as interim CEO. Katz had been in the role since June 7, and remains on the board, which she joined in April. She is the former president and CEO of the Neiman Marcus Group and had taken over the Intermix duties held by Jyothi Rao, CEO, who decided last spring to step down.
In a letter to employees on Nov. 1, Katz wrote: “I’m stepping back knowing that the current leadership team is well suited to continue working to overcome the challenges of our current economic environment. Given these dynamics, we are continuing to evaluate options to improve our position and will keep you updated on developments.”
The Gap sold Intermix to Altamont Capital Partners in May 2021, which included all store leases, e-commerce and assets, for an undisclosed sum. Intermix had accounted for less than 1 percent of Gap Inc.’s sales.
Gap originally bought the retailer in January 2013 for $130 million in an effort to put a contemporary and hipper fashion halo over the San Francisco-based group while also planning to expand Intermix. On both accounts, that didn’t happen and some criticized the acquisition as a distraction for Gap.
Officials at Altamont Capital Partners weren’t reachable for comment. Altamont’s portfolio includes such brands as Planet Fitness, Billabong and Brixton.
Gary Wassner, CEO of Hilldun Corp., the company’s factor, declined to comment.
Among the contemporary and designer brands that are sold at Intermix are Ulla Johnson, Frame, Jimmy Choo, Altuzarra, A.L.C., Ganni, Isabel Marant, Ronny Kobo, Veronica Beard, L’Agence, Mackage, Missoni, Proenza Schouler, Re/Done, Cinq à Sept, Jonathan Simkhai, Farm Rio and LaQuan Smith.
Some observers believe that although there’s space in the market for a multibrand retailer — of which Intermix was a pioneer before competitors such as Net-a-porter, Revolve, Frwd, MyTheresa and Matchesfashion came on the scene — Intermix has lacked a creative visionary merchant to run it. When it was run by its founder Khajak Keledjian, he was that person and was known for having a flair for understanding the merchandising and the operations. Rao was said to have done a good job as well, but Intermix could tolerate more financial stress when it was owned by Gap, said sources.
One source said being a multibrand retailer in today’s challenging environment — particularly when everything is so vertical — is hard and companies need to be innovative, invest in the brands and make the brands their partners. “Retailers have to think about what you do tomorrow and just can’t feel comfortable in what worked before,” the source said.
“Multibrand retailers have to be constantly reinventing to remain at the top of their game. I think Intermix has great history in the fashion world and still can,” said another source.
One apparel executive said he wouldn’t be shipping to the retailer because it was too risky a proposition, while another vendor told WWD they were waiting to receive more information before they plan their next steps.
One vendor said they have produced the holiday/resort and pre-spring merchandise and would ship if they were paid in advance. Another company contacted said they weren’t aware of any financial problems, and they have continued to ship, but did notice a lot of merchandise was on sale on the retailer’s site.
The Intermix site has a 15 percent sale going on (take 15 percent off the next purchase) and alludes to a big sale coming when a visitor signs up for emails. The site also has many markdowns in various categories, with especially deep discounts on summer merchandise.
