Owning niche not enough for Tall Girl Shop

From Wednesday's Globe and Mail

RETAILING REPORTER

It was launched 50 years ago at a storefront in Calgary by a geophysicist who, at 5 feet 11 inches, couldn't find clothing in Canada to fit her tall frame.

Tall Girl Shop Ltd. grew over the years to more than 40 stores in Canada and the United States, profiting from little competition among fashion retailers catering to tall women. It was one of the few Canadian chains to succeed in expanding into the United States.

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But times got tougher for founder Hazel Gould, and her stores became tired and dated, industry observers said. They weren't doing enough to woo a younger customer with shifting tastes. By 2007, Ms. Gould named her daughter Linda as chief executive officer to breathe new life into the chain. But the recession came as the final blow.

By early this month, Tall Girl notified federal authorities that it was insolvent and intended to restructure under bankruptcy laws, owing creditors about $5-million, according to court documents. It has until Oct. 4 to tell the Ontario Superior Court just how it plans to patch up its troubles, said Michael Baigel, senior manager at Farber Financial Group and trustee overseeing the matter.

"Everybody else has changed around them and they really haven't," said Maureen Atkinson, senior partner at retail consultancy J.C. Williams Group Ltd. "They have a very mature approach to their product. You just have to look at their stores. Their inventory isn't fresh. They haven't been investing in their stores. They haven't really kept up with styles."

Tall Girl gained an edge by stocking upscale fashions for tall women who struggled with short shirt sleeves and pant legs. Hazel Gould knew all about the challenges: She was often forced to sew her own clothes and alter men's pants and shirts.

At Tall Girl, she made sure that pattern makers didn't just add inches to the length of a garment, but also adjusted the sizing at the hip and torso. About 80 per cent of its lines are custom-made for the chain, while the rest are labels such as Jones New York.

Today the retailer, with 31 outlets - including 17 U.S. stores - and between $20-million and $25-million of annual sales, has been dragged down by the downturn and its own internal challenges.

"Over all, I was never super-impressed with the styles," said Amy Byrne, a 5-foot-10-inch operations manager in Chicago who used to shop at a Tall Girl in suburban Detroit, close to where she lived.

"I liked the workout clothes but they were too expensive," Ms. Byrne, 35, said. "There weren't [career]clothes for the age range I was in, or for how I would dress."

Now, she heads to the Limited or Gap stores for items they stock specifically for tall women at more reasonable prices, she said.

Gordon Shearer, vice-president of finance at Tall Girl, said its prices are about 5 to 10 per cent higher than merchandise in regular clothing stores. Manufacturers charge the chain about 10 per cent more to recut patterns for a taller fit, he said.

Tall Girl also has been limited in expanding its store base to get more economies of scale, he said. Its customers are spread across vast geographic areas, rather than concentrated around its retail locations, he said. In the past year or so it closed weaker stores.

And while it faces few rivals in the tall-woman segment, its fashions are often "dowdy" and cater to too wide an age and fashion range to achieve a clear focus, Wendy Evans of Evans & Consultants Inc. said. "They're appealing to a size, not a look," she said. "That's difficult to do."

Even the name is dated, Ms. Atkinson added. "It's like 'career girl.' No one would say that any more."

Despite its difficulties, Tall Girl may have life left in it yet. Mr. Baigel said it is looking at a variety of restructuring options, including finding a buyer and shutting more stores.

It would fit well with women's clothier Reitman (Canada) Ltd., which already runs a number of plus-size women's fashion chains, such as Addition-Elle and Penningtons, Ms. Evans said. CEO Jeremy Reitman, who constantly considers acquisition candidates, did not return messages. A department store retailer such as Hudson's Bay Co. could also look at putting Tall Girl boutiques within its stores, she said.

Tall Girl's e-commerce site is particularly attractive to a buyer, she said. The online business can serve a wide geographical region, rather than being limited to a store's surrounding shopper base.