Owner of Ethel’s
shutting its doors

The decision to close more than 20
retail sites statewide will leave
238 workers unemployed

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By Tim Ruel
truel@starbulletin.com

The 93-year-old family company that owns more than 20 retail locations in Hawaii under household names including Ethel's and Body Shop clothing stores plans to close permanently after the year's end, putting 238 employees out of work.

Chun Kim Chow Ltd., founded in 1908 by a Chinatown shoemaker, is closing 21 stores, three shoe departments and its warehouse on Sand Island Access Road, the company said in a filing yesterday with the state Department of Labor and Industrial Relations.

The first store will close this month, then several will follow in December and the rest will close at the end of January, the filing said. None of the employees will be laid off until after Dec. 31.

Janet Kwak, store manager at Ethel's Dress Shoppe at Ala Moana Center, said she already has been telling customers about the closure. "It was really a big blow, because we were really secure," she said. "We were here for so long."

Company officials did not respond to several requests for comment yesterday.

In the filing, Chun Kim Chow blamed years of "continuing financial losses" made worse by the economic downturn following the Sept. 11 attacks.

The firm had talked about shutting down in the past, said Ron Yoda, general manager of Kahala Mall.

"I think businesswise things could have been better," Kwak said. "We had some really good years and we made a lot of profits," but the last three years have been tough, she said.

Sept. 11 had a double-whammy on the firm, first with a drop in Hawaii's tourism spending, then through the aftermath of the thousands of local jobs that were sliced, Kwak said.

Right after the attack, several Ethel's customers rushed into the Ala Moana store to return merchandise. "There was a big scare," she said.

Stores to close >> Robins Shoe Stores: four on Oahu, one on Maui >> Ethel's Dress Shoppe: four on Oahu >> Body Shop: three on Oahu, one on Kauai >> Wildflowers: three on Oahu >> Kim Chow Shoes: one on Oahu >> Gloria Jean's Gourmet Coffees: one on Oahu >> Xavier Men's Shoes: one on Oahu >> Runway 7 clothing: one in Hilo >> Nicole: one on Oahu Plus: >> Three shoe departments

The firm is now offering sales of merchandise, ranging from 25 percent to 75 percent off.

Among those who will be laid off are 29 supervisors, 15 store managers, eight purchasing agents and 144 sales associates, according to the state filing. Kwak said she did not know the details of the severance packages that would be offered.

At one time, Chun Kim Chow had as many as 90 stores in Hawaii and was the state's largest independent shoe retailer. The firm began scaling back around 1995, when GEM of Hawaii went out of business, said Renton Nip, a Honolulu attorney who is acting president of Chun Kim Chow.

Bankruptcy remains an option, said Nip, who is a grandson of the firm's founder. Nip said he hopes Chun Kim Chow can work with its vendors and landlords to stay in business in some form. "We're working every day at it," he said.

It's not clear what will happen to the company's real estate holdings, including the downtown building that houses its offices at 1159 Fort Street Mall.

The firm bought the Sand Island warehouse for $1.25 million in 1985, property records show. Chun Kim Chow officers are also tied to companies that own the Punahou Circle Apartments and a small office complex in Kakaako.

Among the retail outlets that will close are five Robins Shoe Stores, three Wildflowers women's apparel shops and one Gloria Jean's Gourmet Coffees outlet at Windward Mall. The company previously closed another Gloria Jean's at Pearlridge center.

The firm is also closing a Runway 7 clothing shop at the Prince Kuhio Plaza in Hilo and a Xavier men's shoe store at Ala Moana Center.

Kahala Mall faces the loss of three tenants, including Nicole shoes, Ethel's and Body Shop. The mall, which is otherwise fully occupied, hopes to compensate for the loss with strong sales during the Christmas shopping season, Yoda said.

Chun Kim Chow had strong marketing and merchandising based on decades of experience, Yoda said. "They had very loyal customers, and that just comes with time and understanding the customer," Yoda said.