Jacobson’s Going Out of Business

The retail world has lost another piece of its history with the recent liquidation of Jacobson Stores.

After 134 years in business, the upscale Jackson, Mich.-based specialty retailer will soon be closing its doors for the last time. Jacobson’s began conducting going-out-of-business sales at all of its 18 locations in late July. The sales include storewide discounts off the lowest ticket prices in all merchandise categories. The retailer said the sales would continue until all merchandise has been sold.

Jacobson’s decided to fold its operations after months of unsuccessfully trying to sell the company as a going concern.

The specialty retail chain, which filed for Chapter 11 bankruptcy protection in January, had struggled with falling sales and mounting losses in recent years. In its most recent fiscal year ended Feb. 2, Jacobson’s saw net sales plummet by 12.7% to $401.8 million. Comparable store sales decreased by 11.8%. The company sustained a net loss of $60.1 million, or $9.89 per share, in fiscal 2001.

Known for its upscale fashions and personal customer service, Jacobson’s had trouble competing against larger, lower-priced competitors. Analysts and other observers also say the company’s decision a few years ago to go from a regionalized to a centralized buying structure hastened its demise. The move cost the company the competitive regional edge it had built up over many years of observing buying trends in the individual markets it served.

Although Jacobson’s had stores in five states (Michigan, Florida, Indiana, Kansas, and Kentucky), Michigan and Florida were its core markets. The retailer specialized in apparel, home furnishings, giftware, and fine jewelry.

In addition to approving the liquidation process, the U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division, also approved separate bids to purchase the retailer’s merchandise and to purchase its accounts receivable.

A joint venture group including Gordon Brothers Retail Partners, SB Capital Group, Tiger Capital Group, and Buxbaum & Associates are managing the going-out-of-business sales. Jacobson’s is liquidating more than $100 million of merchandise inventory.

Jacobson’s owns most of its locations, and analysts expect the company to sell at least some of those locations as part of the liquidation process.