Port Washington, N.Y. Steve & Barry’s University Sportswear may close an estimated 100 stores, roughly 40% of its 245-store portfolio. According to a report posted online by The Wall Street Journal, store closings may be the prelude to bankruptcy and full liquidation.
The struggling retailer is seeking $40 million in emergency funding, the WSJ article reported, and has a tentative agreement for $20 million from private-investment firm Angelo, Gordon & Co. However, an additional $20 million, reportedly enough to carry Steve & Barry’s through the holiday season, has yet to be raised.
According to The Chicago Sun Times, Sears chairman Edward S. Lampert has been approached as a possible investor and the Wall Street Journal cited a number of other potential retail investors including Wal-Mart Stores and Gap, Inc.
Steve & Barry’s aggressive growth strategy has propelled the company from 195 stores and estimated sales of $700 million in 2006 to estimated sales in excess of $1 billion in 2007.
The company’s trademark formula, super-size stores with super-low prices and celebrity-branded partnerships, found favor with landlords looking to fill empty anchor spaces. However, despite its ability to sign lucrative leasing deals, Steve & Barry’s has not been able to achieve profitable operations.
Speculation in the industry is that Steve & Barry’s may survive as a wholesaler, providing private-label merchandise to other retailers.