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NI

Nine West

retail
PE-OWNED

Women's footwear and accessories retailer and wholesaler.

PE-OWNED

Acquired by Sycamore Partners2014-01-06

View PE Firm Profile

What Made It Great

“

Leading women's footwear brand with retail stores and wholesale distribution

What PE Will Likely Do

Predictions

Nine West will likely see a significant decline in the quality and selection of their women's footwear and accessories over the next few years

HIGH LIKELIHOODBased on: Sycamore Partners' track record of bankruptcy and cost-cutting tactics in previous retail acquisitions

Consumers can expect to see lower-quality materials, such as cheaper leathers and plastics, used in Nine West's shoe and accessory production

HIGH LIKELIHOODBased on: The industry playbook for common private equity strategies in the retail sector, including debt loading, dividend recapitalization, store closures, inventory reduction, and maintenance deferral

The variety and styles of Nine West's product offerings will likely be reduced as the company focuses on cost-cutting measures

HIGH LIKELIHOODBased on: The previous bankruptcy case of Nine West in 2014, which demonstrates the vulnerability of the brand to such private equity tactics

Shoe repair services and the availability of replacement parts for Nine West products will diminish as the company defers maintenance and renovations to its retail locations

HIGH LIKELIHOODBased on: The previous bankruptcy case of Nine West in 2014, which demonstrates the vulnerability of the brand to such private equity tactics

Expected Timeline

Phases
0-6 monthsCompleted

“0 to 6 months months”

Nine West will announce 'optimization' plans, which will likely include store closures and staff reductions

6-12 monthsYOU ARE HERE

“6 to 12 months months”

The first wave of store closures and inventory reductions will be implemented, leading to a noticeable decline in product selection and availability

12-24 months

“12 to 24 months months”

Customers will start to notice a drop in the overall quality of Nine West's footwear and accessories, with cheaper materials and fewer unique styles

24-48 months

“24 to 48 months months”

Bankruptcy rumors will begin to circulate, and Nine West will further cut costs by deferring store maintenance and renovations, leading to a deterioration of the in-store shopping experience

48-60 months

“48 to 60 months months”

Nine West may face a potential restructuring, liquidation, or fire sale, ultimately resulting in a significant loss of the brand's value and identity

Similar Cases

Other companies that followed a similar path after PE acquisition

Operating

Toys R Us

KKR·2005

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Bankruptcy

Sports Authority

Leonard Green & Partners·2006

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Operating

Payless ShoeSource

Golden Gate Capital·2012

See full case study
Operating

99 Cents Only Stores

Ares Management·2012

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Operating

Joann

Leonard Green & Partners·2011

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What You Can Do

Take Action

Actions

  • Consumers should be wary of purchasing Nine West products in the coming years, as the quality and selection are likely to decline significantly

  • Customers should consider alternative women's footwear and accessory brands that are not owned by private equity firms with a history of aggressive cost-cutting measures

  • If possible, consumers should look for opportunities to purchase Nine West products before the anticipated quality decline, as the brand's value may be significantly reduced in the long term

Alternatives

CostcoSAFE

Employee-owned warehouse retailer

TargetSAFE

Publicly traded retailer with strong values

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"Nine West is now PE-owned. Here's what that means for you."