National discount department chain Stein Mart has filed for bankruptcy after 112 years in the company, and announced Wednesday that it will close most of its 280 stores.
“The combined effects of a challenging retail environment coupled with the impact of the coronavirus pandemic have caused significant financial distress to our company,” CEO Hunt Hawkins said in a statement announcing. “The company lacks enough liquidity to continue in the normal course of business.”
Headquartered in Jacksonville, Florida, Stein Mart has more than 280 stores in 30 states that specialize in clothing, footwear and leather goods. The company first opened its doors in Mississippi in 1908. Since then, many of the stores opened in community shopping centers primarily in the Southeast.
Hawkins said Stein Mart will normally operate “in the full term” and evaluate the potential sales of its e-commerce arm.
A sold-out sale will begin Friday or Saturday, according to spokeswoman Linda Tasseff. Stores will be closed after October, although exact closing dates will be according to location.
“Please know that this was a very difficult decision, and is deeply disappointing for all of us at Stein Mart,” Hawkins said in a statement. “We have been serving our communities all these years and are so grateful to our loyal customers who chose our stores.”
Stein Mart temporarily shut down its businesses on March 18 during the first wave of the pandemic. It started reopening in April, and eventually they reopened all its stores with reduced hours. The company lent $ 10 million in June under the Federal Paycheck Protection Program, a federal initiative aimed at small businesses that are affected by the coronavirus.
Still, Stein Mart’s financial struggles pre-date the health crisis. In the first quarter, its sales fell to $ 134 million, sharply down from $ 314 million in the period of the previous year. The company had nearly $ 200 million in total debt by May 2, court documents show.
The company has nearly 8,000 workers, but many were furloughed after the virus temporarily shook its stores, Hawkins said in court documents.
The pandemic puts an a out barrage of bankruptcies this year, with thousands of U.S. retailers, energy companies and other companies undergoing the recession caused by the pandemic. There were more than 3,600 chapters 11 business applications this year – a jump of 26% from the year-on-year period, according to Epiq Global.
About two dozen retailers, large and small, have submitted for Chapter 11 protection this year, which is the number for the whole of last year. Among them were Lord & Taylor; J. Crew; JC Penney; Neiman Marcus; Men’s Wearhouse; Jos A. Bank; Stage Shops; and Ascena Retail Group, which owns Lane Bryant and Ann Taylor.
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