Report: Steve & Barry’s Calls It Quits
Port Washington, N.Y. Despite trying for several months to salvage the company, the word is that Steve & Barry’s has pulled the plug. The company has filed for bankruptcy a second time, less than five months after its initial filing, but this time the report is that the exit strategy is to liquidate.
Steve & Barry’s had filed for bankruptcy protection in July, and the following month sold its business to the investment firms Bay Harbour Management and York Capital Management for $168 million.
However, the 276-store retail chain is unable to get additional financing in the current economic environment. It filed for Chapter 11 in Manhattan late Wednesday under the name BH S&B Holdings.
According to a court filing, “sales at all stores have been disappointing” because of “the general health of the American economy and the state of the retail market in particular.” As a result, the new owners violated covenants under their senior-secured credit facility, and have no prospects to obtain financing to keep operating the stores, the filing shows.
“The appropriate course of action to maximize value for the benefit of all their stakeholders is an orderly liquidation,” according to the filing. The liquidation is scheduled to be completed by the end of this year or early 2009, it shows.
RAS Management Advisors LLC is serving as restructuring adviser, and a joint venture led by Great American Group LLC will assist in the liquidation, the filing shows.
Walmart to partner with Feeding America
BENTONVILLE, Ark. Walmart announced that its supercenters and Neighborhood Markets will partner with Feeding America, the nation’s largest charitable hunger-relief organization, to provide an estimated 90 million pounds of food annually — the equivalent of 70 million meals — to families in need by the end of 2009.
In addition, the Wal-Mart Foundation announced a $2.5 million cash donation to Feeding America. These funds will be used to help Feeding America food banks improve warehouse capacity and purchase 20 new refrigerated trucks to safely transport food from Walmart stores to food pantries, soup kitchens and other Feeding America agencies.
“We are pleased to partner with Feeding America during a time of nearly unprecedented need and provide nutritious meals for their families,” said Bill Simon, evp and coo of Walmart U.S. “Given the current state of the economy and the increased burden on neighborhood food pantries and soup kitchens, we are enlisting our entire network of stores and clubs to participate in this food donation program to provide relief to communities throughout the country.”
Despite 3Q growth, Ross cautious on 4Q outlook
PLEASANTON, Calif. Ross Stores reported that earnings per share for the third quarter increased 22% to 44 cents, from 36 cents for the same period last year. Net earnings for the third quarter were $57.3 million, up from $48.7 million for the third quarter last year. Fiscal 2008 third quarter sales increased 6% to $1.555 billion, with comparable-store sales even with the prior year period.
Michael Balmuth, vice chairman, president and ceo, commented, “We are pleased with our solid third quarter earnings growth, especially considering the very challenging macro-economic and retail environment. The ongoing resilience and flexibility of our off-price business model enabled us to respond to these external pressures by further reducing both inventories and expenses. These actions, along with better-than-expected shortage results from our annual physical inventory during the quarter, enabled us to protect profit margins and deliver earnings per share at the high end of our original guidance.”
Ross said it now expects fourth quarter comparable-store sales to decline 1% to 3% and earnings per share to be in the range of 69 cents to 75 cents, compared to 70 cents in the 2007 fourth quarter.