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NEW YORK — Following several years of shrinking business, Frederick Atkins Inc., the venerable retail buying and consulting firm that once held a major market presence, is calling it quits.
"After 56 years in business, the board of directors has decided to do an orderly winding down of both Atkins offices," Maryellen Bernard, Atkins's president, said in a short statement issued to employees Tuesday.
Bernard said the firm will cease operations on or around Sept. 30, 2000, leading to the dismissal of 90 employees at the two offices, at 1515 Broadway here and at 110 East 9th Street in Los Angeles.
The decision to shut down is not surprising. In recent years, Atkins's retail clients dwindled to a handful of midsized regional retailers: Bon Ton, Elder Beerman, Gottschalks, Peebles and Swezey's. Liverpool, a chain operating in Mexico, is also a member.
Market sources said the company, which is member-owned, failed to adapt to the changing retail landscape, sticking with a traditional group of retailers as its member-client base and failing to attract the Targets, Nordstroms and other aggressive retailers on the rise in the late Eighties and Nineties.
In its heyday, Atkins boasted a roster of powerful retail member clients, such as Dillard's, and Proffitt's, which became Saks Inc.
At one time, Atkins had about 350 employees and a wholesale volume of about $500 million, but reportedly recently did a volume of around $100 million. At one time, the firm provided both domestic market coverage and private label, sourcing and product development services, as well as in-store services. However, as certain retail clients grew, those businesses decided to take product development and other functions in-house to assume greater control and merchandise distinction, hurting Atkins's revenues.
Like other buying offices, Atkins was also hurt by the consolidation of the retail industry over the last two decades, with several retailers merging with other members or going out of business, including the former Hess's Department Stores.
In the late Nineties, Atkins assumed a survival mode. It laid off workers and dropped domestic market coverage to focus strictly on product development in a narrower range of categories.
There were also attempts to merge with rival Associated Merchandising Corp. (AMC). However, the two companies failed to agree on governance issues, among other points. AMC also over the years experienced a loss of business and is now owned by Dayton Hudson Department Stores, a division of Target Corp. Like Atkins, AMC focuses only on product development.
The buying-office industry has shrunk to a handful of players over the past two decades, leaving only one major player, Doneger Group, which itself has grown by acquiring other smaller offices. Doneger would not buy Atkins since it is not in the high-risk business of product development.
Some sources speculated that Bernard, a veteran of the buying office who's spent about 28 years at Atkins, could wind up working for Doneger. However, she reportedly will remain at Atkins until it shuts down in September. She's considered a hard-driving, talented merchant who rose to the top at Atkins about two years ago, but by then it was too late to reverse the downward tide of business.
"Atkins did not move with the times," said one source. "They didn't go after new areas of businesses, like the Internet, or diversify into more retail formats, like off-price."
Frederick Atkins, who operated a dry-goods store in upstate New York, founded the company and sold it to his retail clients in 1946.