Steve & Barry\'s (Massena NY)

[dmx10101]

Steve & Barry's Faces Cash Crunch
Fast-Growing Chain
Seeks $30 Million;
Chapter 11 May Loom
By PETER LATTMAN and JEFFREY MCCRACKEN
June 21, 2008; Page A4

As one of the country's fastest-growing store chains, Steve & Barry's LLC was billed as the future of discount retailing. It boasted of massive expansion plans, built on the back of fire-sale prices of clothes and shoes promoted by the likes of actress Sarah Jessica Parker and professional basketball player Stephon Marbury.

That future now looks bleak.

The closely held retailer is racing to find rescue financing of about $30 million. If it is unable to secure backing, it could seek protection from creditors sometime in the next month, say several creditors, bankruptcy lawyers and retail experts familiar with the matter. Steve & Barry's has hired Goldman Sachs Group Inc. to seek out financing and hired a bankruptcy lawyer to advise it on a restructuring, say these people.

A spokesman for Steve & Barry's declined to comment. Its attorney, New York-based retail-bankruptcy veteran Paul Traub, also declined to comment when reached Thursday.

The cash crunch comes even as Steve & Barry's expands across the country, with stores already in 40 states hawking exclusive fashion lines endorsed by tennis player Venus Williams and actress Amanda Bynes. Since May 15, it has opened nine stores, from upstate New York to Kokomo, Ind., and San Jose, Calif.

Steve & Barry's is just the latest retail player hurt by the economic downturn, and its demise would be a big blow to struggling mall owners. An ailing economy and $4-a-gallon gasoline have wreaked havoc upon the retail landscape, pushing the likes of Sharper Image Corp. and Linens n' Things Inc. into bankruptcy protection.

With fashionable clothes priced below $10, Steve & Barry's deep-discount model was built to thrive in such an environment. In a 2006 interview with The Wall Street Journal, co-founder Barry Prevor said the U.S. market could support 5,000 stores. Its founders have dubbed their effort the "Google of retailing."

The company currently has 270 stores and projected 2008 revenue approaching $1 billion, with earnings before interest, taxes, depreciation and amortization of roughly $20 million, said two people familiar with its finances.

But some of the forces pushing Steve & Barry's growth were not tied to end-consumer demand, but the needs of mall owners in a softening commercial-real-estate market. Much of the company's earnings came in the form of one-time, up-front payments from mall owners. Those payments were designed to lure the retailer to take over vacated sites, say several people familiar with the company.

Without these payments, the stores are barely profitable, if at all, people familiar with the company's finances say. In recent weeks, the retailer has been seeking at least $30 million to fund operations through 2008. It has approached a number of financing sources, say these people.

Without additional capital, the company's fate will largely be determined by the commercial-lending unit of General Electric Co. It provided the company with a roughly $200 million credit facility in March, and the company is already in default on that loan, said three people familiar with the matter.

Steve & Barry's closing would be another blow for owners of malls and shopping centers, who have struggled to cope with the 6,500 store closures predicted for this year by the International Council of Shopping Centers.

Steve & Barry's eagerly snapped up big-box sites vacated by consolidating chains like Macy's Inc. At a shopping-center conference in May, several mall owners said Steve & Barry's was one of the answers to the industry's problems filling vacant space.

"They should be able to see through this," said Anthony Cafaro Jr., a vice president at Cafaro Co., a large Youngstown, Ohio-based mall developer that leases 10 sites to the company. "They still have that sensational 'wow' factor in terms of their prices—it's a great concept."

Part of the chain's attraction has been its low prices. Everything from sweatpants to jeans to down jackets cost less than $10. The chain has a miniscule advertising budget. Mr. Prevor is also considered a master "tariff arbitrager," carrying an encyclopedic knowledge of tariff codes so the business can reduce costs by manufacturing products in such far-flung locales as Lesotho and Malawi.

Steve & Barry's has received much attention for its celebrity-branded products. In 2006, it signed National Basketball Association star Mr. Marbury to endorse a line of $14 sneakers called Starbury, which were hailed as an antidote to the prices for Nike and other basketball shoes. It also made a splash with a line of clothing designed by Ms. Parker, who named the line Bitten because she was "bitten by the Steve & Barry bug," she has said.

Last year, Ms. Parker and Mr. Marbury appeared on the Oprah Winfrey Show to promote their lines and the trend toward "cheap chic."

Mr. Prevor and Steven Shore were childhood friends from Long Island, N.Y., and opened their first store in 1985 in Philadelphia, selling discount University of Pennsylvania apparel and undercutting the campus bookstore. They slowly opened outlets in college towns across the country before transforming Steve & Barry's into a big-box-mall retailer.

In 2005, the International Council of Shopping Centers honored the chain with its "Hot Retailer Award," given each year to stores considered by mall managers as the best at generating buzz and bringing more shoppers to the shopping centers they occupy.

Later that year, the duo fueled those ambitions with investment capital obtained during the credit boom. Private-equity firm TA Associates Inc. paid $320 million for roughly half of the company. About half of that went into the company, with the balance -- about $170 million -- being paid to Messrs. Prevor and Shore.

[Zayre88]

They just opened a new store replacing the long vacant Porteous at the Auburn Mall (maine)...  If it closes, that would hit the mall again!

[mikey7290]

They also opened a store last fall in the former Ames space at the St. Lawrence Centre mall
in Massena (NY).  The mall's owners had been desperately trying for five years to fill the space,
meanwhile all of the neighboring stores had closed.  With Steve & Barry's there, they are hoping
to fill up the surrounding space once again.  I doubt that will happen if they close.

[shakethis1234]

I see Steve Barrys are near CH 11 they are planning on closing 100 store

[shakethis1234]

Steve & Barry's is readying plans to close more than 100 of its stores, and is contemplating a full liquidation should it not find emergency financing, The Wall Street Journal reported on Monday.

The article, citing people familiar with the company, said the retail chain is seeking a tentative plan for about $40 million in debtor-in-possession financing if it must file for bankruptcy protection. Steve & Barry could not immediately be reached for comment.

The report said that last weekend, Steve & Barry's bankruptcy counsel, Weil Gotshal & Manges, prepared for a potential bankruptcy filing as soon as this week.

The article said bankruptcy attorney Harvey Miller is handling the case. Mr. Miller could not immediately be reached for comment.

[Toys4Joy]

Is it just me or do all Steve and Barry stores have the same kind of weird smell?  You could blindfold me and before entering that store I would know where I was.

[dmx10101]

Steve & Barry's, Discount Retailer, Seeks Bankruptcy (Update2)

By Dawn McCarty and Tiffany Kary

July 9 (Bloomberg) -- Steve & Barry's LLC, the discount seller of clothing lines by celebrities including Sarah Jessica Parker, sought protection from creditors, joining at least 10 U.S. retailers in bankruptcy this year as consumers cut spending.

The company, based in Port Washington, New York, listed $693.5 million in assets and $638 million in debt as of May 31 in documents filed today in U.S. Bankruptcy Court in Manhattan. The company said in a statement that it eliminated 172 jobs today and plans to consolidate offices while seeking a sale to repay debt.

``The generally poor environment for apparel retailers has reduced funding to our suppliers, landlords, and to our company,'' Steve Shore and Barry Prevor, founders and co-chief executive officers, said in the statement.

The childhood friends, who made silk-screened T-shirts and sold them for $1 each as teenagers in suburban New York, founded Steve & Barry's in 1985, when they opened a clothing store at the University of Pennsylvania, according to the company's Web site. The chain now sells lines including Parker's Bitten, the Starbury Collection of athletic apparel by National Basketball Association player Stephon Marbury, and clothing based on CBS Corp. television shows, with items priced at less than $20.

Stores are open today, accepting gift cards and returns, Steve & Barry's said. The company, with 275 stores in 40 states, opened 10 new stores this year and had plans for at least 10 more, according to its Web site.

Rising Costs

Sales rose 70 percent in the first five months of 2008 from a year earlier, Steve & Barry's said, not enough to make up for surging fuel and material costs and tighter budgets for shoppers, which limited the company's ability to raise prices.

``Fast expansion may produce significant top-line numbers but you have to be able to manage a company that expands as rapidly as this one did,'' said Stuart Hirshfield, a bankruptcy attorney at Mintz Levin in New York who isn't involved in the case. ``That requires a considerable amount of skill, knowledge and ability.''

Suppliers recently cut access to products and services, and landlords stopped making payments for construction work, forcing the company to default on loans, Shore and Prevor said. The Wall Street Journal reported last week that the company might be forced to liquidate.

``Recent rumors and speculation surrounding Steve & Barry's financial situation have become self-fulfilling prophecies,'' the co-founders said. Suppliers will be paid under normal terms after the filing, and secured lenders gave Steve & Barry's permission to use cash collateral to pay operating costs, the company said.

Sixty-three affiliates also filed for Chapter 11 protection.

[Lastdaysofrain]

They JUST opened one of these in the Liberty Tree Mall in Danver, MA less than a month ago.  I went last weekend and bought a bunch of stuff and thought it was a pretty cool store.

[dmx10101]

Originally posted by Lastdaysofrain
They JUST opened one of these in the Liberty Tree Mall in Danver, MA less than a month ago.  I went last weekend and bought a bunch of stuff and thought it was a pretty cool store.

pic of Liberty Tree Mall store

[bargansbythebagful]

Smells like your fishing by a river on a hot day almost like dead fish

[Zayre88]

Recently opened Steve & Barry's at the Auburn Mall (Maine).  They didn't do much to improve the exterior of the old Porteous in which they opened...  I've read that maybe Eddie Lampert would be interested in buying the troubled chain and add it to it's holdings (for real estate??, to open more Sears stores ?? )

[tokensafari]

Yeah, i read that too, but Sears isn't in great shape either. Lets spend money we dont really have.

[dmx10101]

Steve & Barry's may live on under new ownership

By SARAH SKIDMORE – 2 days ago

PORTLAND, Ore. (AP) — Popular but troubled retailer Steve & Barry's may live on under new ownership.

The company announced Thursday that BHY Holdings LLC, an affiliate of investment firms Bay Harbour Management and York Capital Management, won a bid to buy the chain for $168 million.

The deal is headed to court for approval Thursday afternoon. If that happens, the acquisition is expected to be completed Aug. 25.

Steve & Barry's LLC, based in Port Washington, N.Y., filed for Chapter 11 bankruptcy protection in July, after ambitious growth plans were hurt by slowed spending by consumers and the credit squeeze.

Douglas Teitelbaum, managing principal of Bay Harbour Management, said if the deal is approved, many of Steve & Barry's 276 stores will remain open. and while it would close stores that are not profitable, it may look at new locations.

"During their extreme growth mode, which was too ambitious, they took on some leases at the wrong price and wrong location," Teitelbaum told The Associated Press.

He said the ownership expects to decide within a week which stores will close, ultimately determining how many jobs are affected at a store level. Teitelbaum said the owners plan to add staff at a corporate level.

The chain made a big splash with malls and consumers by offering large stores filled with low-priced clothing and shoes, featuring lines from a number of celebrities such as Sarah Jessica Parker, NBA star Stephon Marbury and Venus Williams.

"In my mind the American consumer is stretched," Teitelbaum said. "We are Americans who like to shop but this is not the best economy we've ever had. What we need is value."

He said the company was able to thrive because of its ability to sell items with value, style and celebrity edge.

Teitelbaum said Steve & Barry's would continue its endorsements with all the athletes and celebrities.

Sarah Jessica Parker expressed support for the company continuing to operate and said she looked forward "to continuing our strong partnership."

However, the company is assessing the situation with Marbury, who filed a complaint earlier this week that alleges he has unpaid royalties from Steve & Barry's.

"I am a Knicks fan, I am a Stephon Marbury fan," Teitelbaum said. "I have phenomenal respect for him and what his relationship with the company has been. ... I'm going to buy the company and then figure this one out."

Bay Harbour does have experience in purchasing distressed companies and turning them around. The firm bought retailer Barneys New York out of bankruptcy before selling it to Jones Apparel Group Inc. And its holdings include the former Aladdin Casino, which is now operating on the Las Vegas strip as the Planet Hollywood Resort and Casino following a rebranding

[shakethis1234]

Bay Harbour is also the largest share holder of Penn Traffic Company parent company of P&C Foods

[Marc82]

Just announced on NewsChannel 8 WTNH. The following Steve and Barry's in Connecticut will be closing - Meriden, Waterbury, and Trumbull. Milford will remain open. *Sigh* They moved (or closed) 6 stores to make room for S&B at The Meriden Square. Now there's gonna be a huge Empty space in that wing. As if the mall didn't have enuff problems.

[shakethis1234]

three are closing in the Central New York area Fingerlakes Mall Auburn, The shops at Ithaca MAll Ithaca Riverside Center Utica NY but my paper did not say anything about the one up in messena that one will prolly stay open. I dont see them closing that store because its right on the boarder

[dmx10101]

According to news stories online, the new company that bought Steve & Barry's are closing about 100 of the chains 276 stores.

[powersbt]

Originally posted by shakethis1234
three are closing in the Central New York area Fingerlakes Mall Auburn, The shops at Ithaca MAll Ithaca Riverside Center Utica NY but my paper did not say anything about the one up in messena that one will prolly stay open. I dont see them closing that store because its right on the boarder

Just saw that today that the one in Riverside Center is Closing. Another Blow to that Shopping Center. This leaves the Center with Walmart, BJ's, Lowes, and Tractor Supply after this, Linens and Things, and AC Moore close.

I can probably guess that the Steve and Barrys that was to go into the Former K-Mart in Southside Mall Oneonta will no longer happen.

[Jonah Norason]

Downsizing significantly, closing 100 or so stores!

Unfortunately, can't a find full list...but it is closing in Brazos Mall and Post Oak Mall in Texas, Randhurst Mall, a bunch more in Illinois...please add to list! Northwest Plaza's store is also closing. And Shops at Ithaca Mall.

[Ames#1171]

Story in today's Cleveland Plain Dealer:

Steve & Barry's closing four area stores; three others staying open
Categories: Breaking News, Retail


Steve & Barry's Middleburg Heights store offered a selection of college-logo apparel when this photo was taken in 2006. The store is one of four in Northeast Ohio that will be closing. Three others will remain open.Casual apparel retailer Steve & Barry's, known as the place where every item of clothing costs $10.98 or less, will operate fewer stores under its new owners as it emerges from bankruptcy.
Three Steve & Barry's stores in Northeast Ohio will remain open while four others will close.

The stores at Richmond Town Square in Richmond Heights, Chapel Hill Mall in Akron and Promenade at Belden near Canton will remain open.

Stores that will close are in Plazas of Great Northern in North Olmsted, Southland Shopping Center in Middleburg Heights, Midway Mall in Elyria and Ashtabula Mall in Ashtabula.

Those stores will have "store closing sales" until they close for good at a date to be determined, the company said.

Steve & Barry's, based in Port Washington, N.Y., and named after founders and best friends Steve Shore and Barry Prevor, built a following with its affordable jeans, T-shirts, sweatshirts, jackets and footwear.

Steve & Barry's filed for bankruptcy July 9 and was bought on Aug. 25 by BH S&B Holdings LLC, an affiliate of the investment firms Bay Harbour Management LC and York Capital Management LLC. BH S&B Holdings bought the company and its assets for $163 million.

The new owners plan to run Steve & Barry's as a smaller chain of about 170 stores, a nearly 40 percent decline from the 276 stores the company operated before declaring bankruptcy.

The store in Middleburg Heights is a former Dicks Sporting Goods.

[XISMZERO]

Steve & Barry's has 270 stores and is closing 100 of them (editorial: wow).

More information and premature list on store closures. I was a bit shocked about the Connecticut stat (all stores in CT closing except Milford).

http://www.fatwallet.com/forums/deal-discussion/858513/

[shakethis1234]

5 stores in the CNY area are closing the one in Geneva Ithaca, Fingerlakes mall auburn, Utica, Messena

[d_fife]

that sucks that these stores are closing! why ithaca!  but this chain is an awesome chian and I wonder if some closing stores are ones that opened a months!

[mikey7290]

Originally posted by d_fife
that sucks that these stores are closing! why ithaca!  but this chain is an awesome chian and I wonder if some closing stores are ones that opened a months!

I know.  Massena's store has only been open for nine months.  It's in the old Ames store.  It took years to fill that space.

[d_fife]

Originally posted by mikey7290

Originally posted by d_fife
that sucks that these stores are closing! why ithaca!  but this chain is an awesome chian and I wonder if some closing stores are ones that opened a months!

I know.  Massena's store has only been open for nine months.  It's in the old Ames store.  It took years to fill that space.

wow only 9 months!!! What is Steve and Barry's problem. someone at work used to live in Auburn  Maine until last June and she said no one was in Steve and BArry's (she went to the one in Auburn) and she said the store could not profit on how low priced its merchandised it was. I bet there was a few where they lasted less than 2-3 months!

[dmx10101]

The one in Athens, GA is closing. It was one of the older locations having opened in August 2006. It is located in an old Wal-Mart in a large deserted shopping center.

Edit 9/13- I went there a ouple of days ago and snapped these pics-

[DerangedHermit]

Steve & Barry's is expected to announce they're going out of business this week.

http://www.bloggingstocks.com/2008/11/18/steve-and-barrys-set-to-throw-in-the-towel/

[store215]

What a shame..they had good casual clothing and great prices...i'll have to stop in before the liquidators jack up all the prices :(

[dmx10101]

Well that sucks.

[store215]

I stopped by one of their stores today..was able to snag a winter coat for $20. There was no signs of the store closing (yet) but they did have signs on the door saying they "temporarily" couldn't process credit cards. Thursday is the day they are supposedly going to announce liquidation