City Gear, a retailer of premium athletic footwear, apparel and accessories.
Source: City Gear to lay off 51 in Shelby County – The Daily Memphian
In a report by Elle Perry of the Daily Memphian news outlet:
City Gear LLC plans a permanent layoff of 51 workers in Shelby County, effective Feb. 2.
The Memphis-based company filed a Worker Adjustment and Retraining Notification Act (WARN) Notice with the state’s Department of Labor and Workforce Development.
The company, located at 813 Ridge Lake Blvd., Suite 400, notified the department’s Dislocated Worker Unit on Oct. 24, according to the state filing.
That office suite has been listed as the City GEAR Store Support Center.
When the acquisition of City Gear happened I wrote a lot on the matter and then dug a bit deeper into some problems with City Gear. The original conference call transcription can be found here:
Hibbett Sports to Acquire City Gear | Conference Call and Notes
While analysts are high on Hibbett Sports, the share price is up over the year, it seems that the analysts are overlooking the acquisition of City Gear. I made a similar mistake when I recently touted the integration of Citygear.com into the Hibbett.com online site:
While the article doesn’t directly state what is being done here, the 51 people are not at retail locations. The location appears to be more of a logistics downsize which means that the original plan of leaving City Gear to operate independently has been thrown out and Hibbett Sports is more than likely consolidating the warehousing and support services into their home base in Alabama.
Note: A week ago I was asked about Nike’s comment on “undifferentiated retail” and the removal of small accounts. In my book I explained in detail how smaller accounts would have to be absorbed by larger chains as Nike continues to grow DTC. The more I look at the City Gear acquisition and visit the stores (unofficially), the more I stress what Nike is doing to their wholesale accounts who are over-reliant on the Nike wall. Urban retail is no longer protected by the moat of cash customers, remember this as you begin to discuss City Gear letting go 51 employees.
