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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThe Finish Line has ended an unsuccessful attempt to rebrand and revitalize its struggling Man Alive stores by agreeing to part with the 75-store clothing chain.
Indianapolis-based Finish Line today announced that it would pay $7 million to Man Alive Acquisition LLC, which is controlled by Brooklyn-based Jimmy Jazz, to take Man Alive assets and liabilities off its hands.The sale is expected to close in early July.
Finish Line paid $12 million to acquire Man Alive four years ago.
Jimmy Jazz, a retailer of urban clothing, has more than 80 stores on the East Coast.
In April, Finish Line converted four Man Alive stores, including one at Castleton Square Mall, into stores called Decibel. Decibel offers “street fashion” aimed at a broader audience than that of Man Alive. Finish Line spent about a year developing the Decibel concept.
It also converted stores in Dallas, suburban Pittsburgh and Tallahassee, Fla.
The test, which was scheduled to run at least six months, was aimed at making the chain profitable. The revamped stores received new fixtures and a fresh product mix anchored by brand-name jeans and rocker T-shirts designed to attract young men and women – a highly coveted demographic.
A Finish Line spokeswoman declined to discuss results of the conversion test or why the company gave up on it so early.
“This transaction will allow us to exit our unprofitable Man Alive business and focus our time and resources on our successful core Finish Line business and thereby generate enhanced shareholder value,” Finish Line CEO Glenn Lyon said in a prepared statement announcing the deal.
Finish Line will pay $5 million at closing and the remaining $2 million in 12 monthly installments.
Finish Line bought the locally based Hip Hop-themed Man Alive chain in 2005 and quickly tripled its store count. But same-store sales and margins have been falling.
For the fiscal fourth-quarter ending Feb. 28, Finish Line’s same-store sales dipped 2.3 percent while Man Alive tumbled 25 percent.
Same-store sales declines are expected to be even greater when Finish Line reports its fiscal first-quarter earnings on Thursday. For the quarter ending May 31, the company expects same-store sales to drop 3.9 percent for Finish Line and 39.1 percent for Man Alive.
Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.
The company also is expecting a loss of $600,000 on revenue of $267.2 million, a decrease of 7.2 percent compared to the same time a year ago.
Finish Line has 685 of its namesake stores in 47 states and online.
Finish Line shares rose 80 cents this morning, to $7.70.
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