Steve & Barry's LLC filed for bankruptcy protection for a second
time just four months after its first petition was made in July. That's
pretty bad, but what's even worse is the discount clothing retailer
was bought by private equity firm Bay Harbour Management LLC for $163
million only in August and trumpeted the move.
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The PE firm boasted in an Aug. 22 press release that it was "finalizing a strategic business plan that will put Steve & Barry's on track to meet our profitability goals over the long term. The decision to operate with a smaller, more productive store base is integral to that plan."
Bay Harbour immediately closed 103 stores, and, a little more than a more before filing its second petition, Steve & Barry's announced that it had hired a new CEO, Harold Kahn. "I am thrilled about the opportunity to help lead Steve & Barry's, a retailer I believe offers a value proposition that's second to none in the marketplace," he said in a statement. "I've been watching the company closely since it began it launching amazing celebrity collections with Sarah Jessica Parker, Venus Williams, Amanda Bynes, Laird Hamilton and others. I'm looking forward to helping guide the company to ensure it reaches its full potential."
Nobody, however, was apparently watching what the economy was doing. Retailer after retailer -- before and after Steve & Barry's first foray into Chapter 11 -- has filed for bankruptcy this year. You have to wonder what Bay Harbour was thinking. "Since the [103] store closing, however, for various reasons, including the general health of the American economy and the state of the retail market in particular, sales at [the debtor's] stores have been disappointing, and the debtors' revenue has suffered," court papers said. No kidding.
On Wednesday, Bay Harbour threw in the towel that probably should've been tossed in July. It put BH S&B Holdings LLC -- the post-bankruptcy corporate name given to Steve & Barry's -- into a second Chapter 11 stay in the U.S. Bankruptcy Court for the Southern District of New York in Manhattan, with plans to liquidate its remaining 173 stores.
It'll be interesting to see whose hands they'll now end up in. - Jamie Mason
Comments
Bay Harbour is a distressed hedge fund. No ibankers at the shop whatsoever. Maybe they like special situations but they are not private equity players in any way, shape nor form. The shop was done when it's public book portfolio manager Kurt Cellar left along with the woman who ran the place and the marketing efforts. Teitelbaum only cares about celebrity and he divorced his wife of 15 years this year, that is never good for any firm. I suspect they are imploding but not admitting it.