A Stein Mart store in King of Prussia, PA.
Google Earth
Off-price chain Stein Mart announced Wednesday that it has filed for Chapter 11 bankruptcy protection and plans to close most, if not all, of its stores permanently, adding to the turmoil in a retail sector that has been hammered by the coronavirus pandemic.
The company in Jacksonville, Florida, said in a press release that it has already launched a liquidation process to start outgoing sales. It said it is evaluating alternatives, including the potential sale of its e-commerce operations and intellectual property.
“The combined effects of a challenging retail environment, combined with the impact of the Coronavirus pandemic, have created significant financial distress for our company,” Chief Executive Hunt Hawkins said in a statement. “The company lacks enough liquidity to continue operating in the normal course of business.”
Stein Mart shares, which are priced below $ 1, fell more than 42% in premium trading on Wednesday morning. The company has a market cap of $ 14.2 million. The stock has tumbled 56% this year.
Stein Mart operates 281 stores across 30 states in the U.S., according to its website.
More than 40 retailers filed for bankruptcy in 2020, including the chain of home goods Pier 1 Imports, department store operators Neiman Marcus and JC Penney, and clothing brands J.Crew, Brooks Brothers and Ann Taylor owner Ascena Retail Group. Analysts expect this list to continue to grow until the holiday season, as companies that were already fighting for the Covid-19 crisis have stumbled over the edge.
Some come away from their restructuring as smaller businesses, with fewer stores and new owners.
For example, the largest U.S. owner of shopping mall Simon Property Group and the apartment licensing company Authentic Brands Group have won a bidding contest to get the upscale Brooks Brothers men’s chain out of bankruptcy and keep at least 125 Brooks Brothers locations open.
The bankrupt kitchen accessories chain Sur La Table was bought for bankruptcy for nearly $ 90 million, with plans to keep at least 50 stores open.
“There is an appetite [for bankrupted retailers] and we see it, “said Perry Mandarino, head of restructuring and co-head of investment banking for B. Riley FBR, in an interview.” If you have a good brand and if you have a good, loyal customer base, you will have interest and you will survive. ”
Stein Mart has filed for Foley & Larder as its restructuring attorney, Clear Thinking Group as its restructuring advisor and PJ Solomon as its investment banker.
.
