Steve & Barry's To File For Chapter 11 Bankruptcy Protection
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Steve & Barry's Expected To File
For Bankruptcy Protection This Week |
Steve & Barry's is "expected to file for Chapter 11 bankruptcy protection" as early as today, according to sources cited by McCracken & Lattman of the WALL STREET JOURNAL. The retailer "hasn't been able to raise rescue financing in recent weeks, and is considering a plan that would sell off all of its assets." Sources indicated that the company also has "been in last-minute discussions with Sears Holdings Corp., about a bailout or partial sale." The retailer's collapse "stands to hurt everyone from [spokesperson] Sarah Jessica Parker to the nation's struggling mall owners." A bankruptcy filing would be "painful to mall owners across the country, who ponied up hundreds of millions of dollars to attract Steve & Barry's into huge, empty spaces, often as large as 100,000 square feet" (WALL STREET JOURNAL, 7/9). In N.Y., Eric Wilson reports Sears and its Kmart unit were "said to remain interested in some of the labels, but that company was struggling as well." Discussions with Sears reportedly continued yesterday and included the "prospect of selling Steve & Barry's brands at Kmart." Wilson notes Steve & Barry's strategy of "operating on razor-thin margins and of adding stores in distressed locations with special payments from landlords became tenuous in recent months as the economy weakened" (N.Y. TIMES, 7/9).
RAW DEAL: Indiana Univ. (IU) student David Modiano and IU alum Matt Kesten, whose Hoosier Beat company in '06 reached a deal to sell IU men's basketball T-shirts to Steve & Barry's, said that they are "strained financially after the retailer allegedly stiffed them for $12,300." In Chicago, Sandra Guy reports the retailer's first order of 500 Hoosier Beat T-shirts in January '07 "sold out by the end of the basketball season." But Steve & Barry's "wasn't willing to order more shirts," so Modiano and Kesten "lowered their price by 20[%] and offered to increase their order to 2,600 shirts." The shirts were delivered in December, but they have yet to be paid for them (CHICAGO SUN-TIMES, 7/9).
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