Monday, December 7, 2015

Requiem for Bill's Khakis...?

I first discovered Bill's Khakis about 10 years ago at a small shop in Baltimore. A brand that had been around for about 15 years already, located in a renovated hardware factory in downtown Reading, Pennsylvania, it produced quality men's trousers as its backbone. These were American made, with a quality reminiscent of the American khaki uniform trousers of World War II.

But something happened. Most people, probably most customers, didn't even notice, but some of their retailers knew something was afoot. In June 2014 Source Capital, became involved with Bill's Khakis, presumably to provided needed funding. Bill's had begun an aggressive direct to consumer sales and marketing program. Previous to this, Bill's was available at a number of small independent men's clothing stores, but now the customer could order directly from Bill's for the same price. This meant Bill's would get not only their normal wholesale cut, but also the retail profit which is typically 50% of the cost of clothing. Not a bad deal for Bill's, but this meant they were now in direct competition with the very same independent retailers which had built the brand for over 20 years.

I didn't pay much attention personally, that is until this Fall. Suddenly Bill's was on sale. I don't mean a little sale, but over 50% off direct from the manufacturer sales. A pair of $185 trousers for only $85. This meant Bill's was now selling to the public for less than their own retailers (yes some still remain even with the direct sales) could buy the product. December 4th they were selling their original twill trousers for over 65% off retail price. I decided to give it a whirl and tried to order a pair, I mean how could I pass that by. But the website was only showing the trousers for 50% off, not the advertised $45. Later that evening I tried again. The price worked, but once I added the product to the shopping cart, I went to checkout out the the cart was empty. I tried again and again, adding to the cart and then finding it empty. I gave up.

Next day they were on sale again, this time for 70% off. Again the same website results, but now I was really curious...

What I missed on December 4th was the announcement that Source Capital had bought Bill's Khakis for an undisclosed amount according the Reading Eagle. Furthermore Source Capital had partnered with NEJ Inc. NEJ Inc specializes in excess inventory solutions for retailers and brands of apparel.

I then went to the clothing blogs and have found them ripe with rumour to include everything from restructuring to brand liquidation.

According to one online source speaking with an employee over the phone in the warehouse:
- The company was sold about a month ago
- Their previous investor pushed growth aggressively, which led to the explosion of their product line and overall drop in quality
- Bill's had no capital in order to buy the goods and the bottom fell out
- Their previous investor refused to inject any capital into the brand and then the bottom REALLY fell out
- The recent liquidation is an attempt by the new owners to regain whatever capital they can
- The liquidation, coupled with the holidays, has their customer service department completely overloaded. They've just abandoned checking the email account because it's overflowing so don't bother sending a message.
- They have very little left on the shelves. They are completely out of anything in khaki.
All in all, the source seemed hopeful that some semblance of the brand's former glory will be reclaimed once they get over this "hump" and the source believes the new owner understands the market for Bill's.

The fact remains that Bill Thomas seems to have gotten greedy here in a move to increase his profits and distribution at the expense of his long time retail supporters. It will be a shame to see this American made brand disappear if that is the case, all in the name of profit. And it is the customer and the low level employees who will lose in the end.

If the worst of the rumours are true, it may very well be the Requiem for Bill's Khakis. And for that I am sad.

Edit: According to a footnote placed on January 5, 2016 on the Bill's Khaki's website, on November 18, 2015, BK Acquisition, LLC (BK Acquisition) purchased substantially all of the assets of W.Thomas Co.(d/b/a Bills Khakis) through a sale conducted in accordance with Article 9 of the Pennsylvania Uniform Commercial Code (UCC).

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