Fort Worth based Bombay Co Inc is closing its five-year old Bombay Kids brand over the next 12 to 18 months in a bid to turn around its fortunes.
Bombay will replace the kids merchandise with core furnishings, according to sources. To attract customers and drive sales and margins, the company will return to the heritage and capitalize on the niche that it occupies in the specialty home furnishings.
Bombay's decision to leave the profitable segment of juvenile furnishings reflects at least a couple of things. One is the pressure that middle-level retailers are feeling from price-slashing big box stores and high-end niche competitors. The other thing is how deep-seated Bombay's problems are.
"The middle is ugly," said Doug Fleener, president of Dynamic Experiences Group, a retail consultant based in Lexington, Mass.
The struggling Bombay Co Inc, with 472 stores and about 1,900 employees, expects to save $7 million a year by quitting its junior brand Bombay Kids.
Further the company intends to slice $6 million from its advertising dollars and to cut back on price markdowns to save another $11 million.