More disturbing news came out about the operations at Steve & Barry's LLC last week as The Wall Street Journal reported that the vertical retailer is readying plans to close more than 100 of its stores.
In addition, the Journal reported that Steve & Barrys is contemplating a full liquidation should it not find emergency financing. 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. A spokesperson at Steve & Barrys could not be reached for comment.
That report followed stories earlier in the week that Steve & Barry's is seeking about $30 million in funding to avoid filing for bankruptcy sometime in the next month (SEW_0826). The retailer has been hurt more by slower expansion by mall operators than significantly lower demand for its products. It turns out much of the company's earnings came in the form of one-time, up-front payments from mall owners designed to lure the retailer to take over vacated sites. Without these payments, the stores are apparently barely profitable, if at all.
Projected 2008 revenue is said to be approaching $1 billion, with EBITDA of roughly $20 million, two people familiar with its finances told the newspaper.
The report said that last weekend, Steve & Barry's bankruptcy counsel, Weil Gotshal & Manges LLP, prepared for a potential bankruptcy filing as soon as this week. The article also said bankruptcy attorney Harvey Miller is handling the case. Miller could not immediately be reached for comment.