Posted by Colby Rogers
Henrico-based S&K Menswear filed for bankruptcy protection Monday.
The company attributes the move to the same problem facing many retailers - tightening credit and flagging consumer spending.
While S&K stores are still open for business now, the future of the company is in the hands of creditors and a bankruptcy judge.
While restructuring is underway, a judge has ruled that employees will continue to receive pay and that stores will continue to accept gift cards.
S&K employs more than 1,000 people and operates 136 stores. The company showed its first-ever profit loss last February and never recovered.
Two months ago, the men's clothing retailer announced it was closing 25 percent of its stores - four of them in Virginia. It has even been trying to sell its corporate headquarters in Glen Allen.
CEO Joe Olliver took more than $50,000 in pay cuts, hired a strategic advisor and cut 50 jobs at the headquarters. Olliver also announced plans to move certain store locations and reduce inventory.
Pat Fishe, a finance professor at the University of Richmond, says retail sales are dismal and that consumers have all but stopped spending.
"I wear my clothes longer, I wear my shoes longer. I don't get a new car, I repair my car," Fishe said. "That's what people are doing right now.
Whether or not S&K makes it out of bankruptcy may be tied to the economy.
"We'll have to see how that sector of the retail buying public changes," Fishe said. "In the next several months, things could go well for them. The economy could pick up a little bit. Everyone hopes it does and they could come out of this a stronger organization."
(Disclosure: NBC12's parent company, Raycom Media, is one of S&K's creditors. )