The flagship store for Frederick's of Hollywood has lost its lease.
REAL ESTATE
Frederick’s of Hollywood Losing Lease on Flagship Store
Since 2005, Frederick’s of Hollywood has had its flagship store sitting appropriately enough at 6751 Hollywood Blvd., one block away from the Hollywood & Highland retail center and in the heart of the well-trafficked tourist district.
But the lingerie store with a beautiful chandelier in the middle of the shop has lost its lease and has to move out by April 27, store staffers said. So far, they don’t have a new location lined up.
The multi-storied building is being converted into a hotel, one employee said. So the retail chain—with more than 90 stores—has started its store-clearance sale with 30 percent off everything.
Calls to the company’s New York headquarters found no one answering the phone and the voice mailbox full.
The sexy-lingerie company, started by Frederick Mellinger in 1947, has been a Hollywood institution for more than seven decades. For 50 years it was located farther east on Hollywood Boulevard, on the ground floor of the company’s former headquarters.
It was at this flagship store that The Lingerie Museum was located, containing a collection of underwear worn by Hollywood celebrities, such as Madonna’s pointy-breasted corset. The museum did not make the move to the latest Hollywood Boulevard location.
For many years, Frederick’s of Hollywood was the queen of sexy lingerie. And then, in the 1980s, Victoria’s Secret came along and proved to be a tough competitor. In 2001, Frederick’s of Hollywood filed for bankruptcy protection and came out of bankruptcy protection in 2003.
But it has been a struggle. In 2006, Frederick’s of Hollywood merged with publicly traded New York sleepwear manufacturer Movie Star, and the company headquarters moved to New York. At that time, Frederick’s of Hollywood had revenues of $139 million during its fiscal year ended July 29, 2006, while Movie Star’s revenue topped $51 million for its fiscal year ending June 30, 2006. In 2008, the company was renamed Frederick’s of Hollywood Group Inc.
This year, the shareholders of Frederick’s of Hollywood Group approved a sale to HGI Funding LLC, a wholly owned subsidiary of Harbinger Group, and to a group of shareholders who owned 88.7 percent of the stock. The transaction was valued at $24.8 million.
The lingerie retailer’s last financial filings as a public company showed that in recent years it was having a tough time making a profit. For the six months ending Jan. 25, the company had net sales of $43.3 million with a net loss of $12.8 million compared with net sales of $46.7 million with a $15.2 million net loss for the same period last year. Same-store sales were down 7.7 percent.
