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Fee
07-09-2008, 10:49 AM
http://www.marketwatch.com/news/story/story.aspx?guid=%7B4374A5BE%2D10E7%2D456F%2DB336%2 DAE14E8519ECD%7D&siteid=rss


Steve & Barry's files for Chapter 11, to explore sale

By Andria Cheng (http://www.marketwatch.com/news/mailto.asp?x=97+99+104+101+110+103&y=Andria+Cheng&z=marketwatch.com&guid=%7B4374a5be-10e7-456f-b336-ae14e8519ecd%7D&siteid=rss), MarketWatch
Last update: 2:18 p.m. EDT July 9, 2008

NEW YORK (MarketWatch) -- Steve & Barry's filed for Chapter 11 bankruptcy protection Wednesday, becoming yet another victim of the retail downturn and declining credit markets that have clammed up retailers' access to financing.

The Port Washington, N.Y., clothing chain, which offers cheap fashions featuring celebrities such as Sarah Jessica Parker, said it will explore a sale of the company and/or its assets to repay outstanding debt. The retailer will initiate cost-cutting moves that will begin with slashing 172 corporate and field staff positions.

Steve & Barry's 276 store locations in 39 states were open Wednesday and conducting business as usual. The company has 9,600 employees worldwide, including 8,600 in the U.S., said spokeswoman Wendi Kopsick. No decisions have been made about store closings, she said.

While Steve & Barry's has an industry-wide same-store sales gain of 15% from its tie-up with celebrities such as Venus Williams and Stephon Marbury, it has gotten into a liquidity shortfall because of the declining credit markets, which have shut off access to financing. Higher commodities and fuel prices also increased the retailer's costs as economy-battered shoppers cut back on discretionary purchases. The company that touts clothing and accessories for $8.98 or less also didn't get helped by its razor-thin margins, analysts said.

"The generally poor environment for apparel retailers has reduced funding for our suppliers, landlords, and for our company," co-founders and chief executives Steve Shore and Barry Prevor said in a statement. "Since mid-2007, difficult credit markets have caused delays in store openings and landlord reimbursements for store-opening expenditures advanced by the company, which have created cash shortages."

Steve & Barry's last year invested substantially more in capital expenditures than the amounts reimbursed, making it unable to realize planned returns from these investments, the company said.

The company has been in discussions with Sears Holdings Corp. about a bail out or a partial sale, The Wall Street Journal reported earlier Wednesday.

A filing by Steve & Barry's would deal another blow to economy-battered shopping-mall owners that paid hundreds of millions of dollars to lure the chain into empty spaces as large as 100,000 square feet, the Journal reported.

Other retailers that have filed for Chapter 11 protection include Linens 'n Things and Sharper Image.

Many if not all of Steve & Barry's stores could close, the Journal reported, without identifying where it obtained the information. Some suppliers have stopped shipping to the retailer in anticipation of a filing, the paper said.

Steve & Barry's found itself in a financial pinch after it defaulted on a loan made in March by General Electric Co.'s commercial-lending unit, and failed to secure other financing, the New York Times reported, citing people close to the situation.

The company, which claimed annual sales of about $1.1 billion, was hurt by its strategy of running on razor-thin profit margins and of opening stores in distressed locations with special payments from landlords, the Times reported. The strategy became unsustainable recently as the economy weakened, the Times reported.

Childhood friends and co-founders Shore and Prevor got the idea for a cheap-clothing chain after they sold screen-printed T-shirts for $1 at flea markets across Long Island and New Jersey.

They opened their first Steve & Barry's in 1985, selling licensed collegiate clothing at the University of Pennsylvania. The success of that store led them to expand to other universities across the country and eventually, in the late 1990s, to their first mall-based location near Detroit.

In addition to selling licensed collegiate clothing and licensed apparel featuring brands such as Hershey, the retailer began to thrive on a string of celebrity-tied clothing.

In 2006 Steve & Barry's partnered with NBA star Stephon Marbury to sell a line of clothing and shoes, including the $8.98 Starbury II basketball sneakers that Marbury wears on NBA courts, according to the company's Web site.

Last year, Sarah Jessica Parker's Bitten line of T-shirts and dresses was launched with great fanfare. Other celebrity tie-ups include deals with tennis star Venus Williams and NBA star Ben Wallace. http://i.mktw.net/mw3/News/greendot.gif

Andria Cheng is a MarketWatch reporter based in New York.

Leelord337
07-09-2008, 10:54 AM
yeah, nobody shops there. i was in the store and we were practically the only ones shopping there. the clothes feel cheap and thin, and i think they have made an inferior name for themselves and ppl don't wanna shop there.

BreakPoint
07-09-2008, 10:56 AM
the clothes feel cheap and thin, and i think they have made an inferior name for themselves and ppl don't wanna shop there.
Well, what can you expect when every item in the store sells for only $8.98, even the tennis shoes.

Nuke
07-09-2008, 11:01 AM
Hey, I better get over there and stock up on their carpenter's pants before they close up shop. Love them pants. Jeez, only $8.98. How did they ever stay in business in the first place?

lacoster
07-09-2008, 11:46 AM
It was a failed business plan from the get go! They "claimed" sales of 1.1 billion, but think about the millions they give to Sarah Jessica Parker, Venus Williams, Stephon Marbury, and Ben Wallace to endorse their clothes and shoes....When I travel, I haven't seen their retail stores in an actual mall, but rather in seedy strip malls with high theft and bad employees (which also takes from profits).

fridrix
07-09-2008, 12:07 PM
I like their stuffs... I got a Hawaiian style shirt there that I really like. It transcends its price tag. The shoes I found to be heavy and clunky though. They also have a sweater I want; I should have the money saved up by Christmas.

Leelord337
07-09-2008, 12:13 PM
i'm wearing the hawaiian style t shirt right now actually, its orange and says surfs up suits off. its very comfy and looks cool

BreakPoint
07-09-2008, 12:47 PM
I like their stuffs... I got a Hawaiian style shirt there that I really like. It transcends its price tag. The shoes I found to be heavy and clunky though. They also have a sweater I want; I should have the money saved up by Christmas.
Unfortunately, they will probably be gone by Christmas.

djokster
07-09-2008, 01:13 PM
Will the Eleven line exist after this?

bluetrain4
07-09-2008, 01:17 PM
Steve and Barry's worked when it was just campus-based stores that sold college apparel. And back then, everything wasn't so cheap (in terms of quality). I remember being at the store in Ann Arbor, Michigan and getting three really great college t-shirts (short and long sleeved) for under $20.00 100 percent cotton, good quality, comfortable, not too thin, but not those annoying thick t-shirts (who wants a super thick t-shirt? It defeats the purpose).

Then years later I went to one of the "new" stores that in addition to the college stuff (which was now lower quality), they had all these khakis, button-down shirts, pullovers, etc. It is like a really trashy Gap. The clothes were ridiculously cheap. They'd be great if you were vistiting friends at their college and your clothes got stolen or you vomited all over them during a weekend bender and needed replacement clothes for one day until you got home. They'd also make good clothes for painting or doing yardwork where you know they'll get ruined.

But, the idea that these clothes could be used legitimately for any length of time is laughable.

bumfluff
07-09-2008, 01:40 PM
Does this mean Venus is gonna play the US Open naked? Please tell me that won't happen...

atatu
07-09-2008, 03:05 PM
Will the Eleven line exist after this?

Yeah, but it's going to be called Chapter 11 now....

BreakPoint
07-09-2008, 04:27 PM
Will the Eleven line exist after this?
Yeah, but it's going to be called Chapter 11 now....
Ha ha ha!!! Good one!!! LOL :lol:

reesespiecestennis
07-09-2008, 04:45 PM
man i love that store I usually get 2-3 t shirts from there everytime I go across the bay. They aren't bad quality at all.

fridrix
07-09-2008, 04:49 PM
Yeah, but it's going to be called Chapter 11 now....

That was pretty funny... :-?

Leelord337
07-09-2008, 05:19 PM
sometimes stores file for bankruptcy to avoid paying taxes. how many times has donald trump filed for bankruptcy? too many to count.

slice bh compliment
07-09-2008, 05:37 PM
I remember when this one guy declared bankruptcy. He just stood up in the office and yelled, "I DECLARE ... BANKRUPTCY!" And that was it, debt problem solved.

If I recall correctly, that guy was a branch manager at Dunder Mifflin, a medium-sized paper supplier.

NovakWannabe
07-09-2008, 06:16 PM
yeah, nobody shops there. i was in the store and we were practically the only ones shopping there. the clothes feel cheap and thin, and i think they have made an inferior name for themselves and ppl don't wanna shop there.

I've never heard of that company before. Is it located within the Galleria? I live in Houston too! :grin:

skraggle
07-09-2008, 06:24 PM
Yeah, but it's going to be called Chapter 11 now....

Yes, very nice!

beedlejuice22
07-09-2008, 06:34 PM
Yeah, but it's going to be called Chapter 11 now....

Am I the only one who didn't get it? Probably something from before my time.

brayman9
07-09-2008, 06:36 PM
love there clothes almost bought a leather jacket for $8 it was real leather too, made in Sudan

lacoster
07-09-2008, 07:13 PM
love there clothes almost bought a leather jacket for $8 it was real leather too, made in Sudan

I have seen that jacket and it's definitely not leather. It's actually made from cheap Vinyl and Plastic composite to make it look like leather. They call it "durahide," but others call it Pleather (plastic leather) or Fleather (fake leather).

Tennisguy777
07-09-2008, 08:13 PM
Am I the only one who didn't get it? Probably something from before my time.

Yes you are. Eleven is Venus' clothing line. Now when a company files for bankruptcy it is usually chapter eleven. Get it now!

beedlejuice22
07-10-2008, 05:48 AM
Oh. I knew her line is called EleVen I just didn't know what Chapter 11 meant. Thanks.

slice bh compliment
07-10-2008, 06:19 AM
You're a CEO and you don't know what Chapter 11 means? Wow, that's a glass half-full kind of guy!

beedlejuice22
07-10-2008, 02:50 PM
Being the CEO of the rubber band club doesn't take much. All you need is an 8th grade education.

consistency wins
07-10-2008, 03:06 PM
Yeah, but it's going to be called Chapter 11 now....

Stinking hilarious!!!!!!!!!!!!!!!!

goober
07-10-2008, 03:27 PM
did they sell tennis clothes or athletic wear?:o

fantom
07-11-2008, 03:19 AM
How fitting.

"11" filing for chapter 11.

kungfusmkim
07-11-2008, 07:35 AM
i would wear the clothes if it was in Canada and it was for males. Jeesh 20dollars and under for tennis shoes are just a Steal.

slice bh compliment
07-11-2008, 08:15 AM
Saw Venus' shoes up close. They did not look bad to me.

The clothes....I'm guessing the fabrication is on the low-end.
It's amazing the margins on cheaply made apparel from Asia.

There's a company out of Minnesota making great stuff, all in the US. It's called Joc by WSI I think. I got a pair of gym shorts that I love. They are pocketless, so I wear them while working out. But I have a 1hbh, so I could wear them for tennis. Just solid white. I guess they make tee shirts and polos, too. Not real fahsionable. Real basic.