El Portal owner to close eight LV stores

Thursday, Nov. 21, 2002 | 10:58 a.m.

Eight Southern Nevada retail luggage stores operated by Wilsons The Leather Experts Inc., including seven that bear the historic El Portal name, will be closed in a cost-cutting move by the company.

The company's El Portal stores at the Forum Shops at Caesars, Galleria at Sunset, Fashion Show mall, Mandalay Bay and Monte Carlo hotel-casinos, McCarran International Airport and the Fashion Outlet of Las Vegas in Primm as well as the company's California Luggage Outlet at Belz Factory Outlet World will liquidate merchandise and close over a nine-week period, a store official said.

It is unclear how many employees would be laid off or whether some would be transferred to other retail stores operated by Wilsons, based in Brooklyn Park, Minn. Wilsons will keep its six Southern Nevada leather apparel stores, which operate under the company name in malls and as Wallet Works in the Belz outlet mall. The company also has a Wilsons store in a Reno mall.

The closures are part of massive cost-cutting move in which the company is shedding its 135 travel-oriented stores in 28 states and Puerto Rico. Instead, Wilsons, which acquired El Portal from the Borsack family and turned it into a subsidiary in 2000, will focus on its 625 other leather apparel stores in 46 states.

Wilsons' leather stores sell accessories like gloves, wallets, planners and women's handbags, while the travel stores specialize in suitcases, computer cases and briefcases.

Wall Street is applauding the cuts, boosting the stock by 40 percent to $6.16 a share on Wednesday. Today the stock was up another 43 cents a share to $6.59. It's still down from its 52-week high of $15.68.

El Portal started as a single store on Fremont Street in 1936 and eventually expanded to 38 outlets staffed by 500 employees across the western United States. The company had 13 stores and 200 workers in the Las Vegas area when the announcement was made that Wilsons was acquiring El Portal from the Borsacks for an undisclosed sum.

Wilsons' financial fortunes plunged in the travel downturn that followed the Sept. 11 terrorist attacks and the trend has continued.

On Tuesday, the company reported a third-quarter loss of $17 million, 84 cents a share, compared with a loss of $13.7 million, 80 cents a share, for the same period a year earlier. The losses were in line with analysts' expectations.

Revenue was off 5.9 percent to $132.6 million from the previous year's quarter and same-store sales were down 7.2 percent during the period.

When Wilsons acquired El Portal, the company attempted to allow the subsidiary to continue to operate from Las Vegas. Company officials later determined the strategy to be a failure because the company wasn't able to attract retail executives to Las Vegas.

Earlier this year, the company decided to move El Portal's corporate office to the Minneapolis suburb in order to place all of the company's financial operations under one roof. Only two of employees opted to move to Minnesota.

"The problem we had was that there aren't any major retailers based in Las Vegas," Wilsons Chairman and Chief Executive Officer Joel Waller told the Las Vegas Sun's sister publication, In Business Las Vegas, in October. "In Minneapolis, we have corporate offices for Target, Best Buy, Musicland, half a dozen major retailers."

Waller said from the Minneapolis talent pool, he was able to find qualified workers more quickly.

Last summer, Wilsons closed nine underperforming stores and in September, the company sold its El Portal outlet at Desert Passage to Bribor LLC for $255,000. Donald Borsack, a principal with Bribor, opened the store with a new name, Tumi.

Waller could not be reached for comment today on what would become of the El Portal brand once the stores are closed.