Stein Mart files for bankruptcy, plans to close most stores permanently

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Low-cost chain Stein Mart said on Wednesday it has filed for Chapter 11 bankruptcy protection and plans to shut down most, if not all, of its stores permanently, adding to the turmoil in one industry retail industry that has been hammered by the coronavirus pandemic.The Jacksonville, Fla.-Based company said in a press release that it has already initiated a liquidation process to initiate discontinued sales. He said he was evaluating alternatives, including the potential sale of his e-commerce operations and intellectual property.

“The combined effects of a tough retail environment and the impact of the coronavirus pandemic have caused significant financial hardship on our business,” Managing Director Hunt Hawkins said in a statement. “The company lacks sufficient liquidity to continue operating in the normal course of business. ”

Shares of Stein Mart, which are priced below $ 1, fell more than 42% in pre-market trading on Wednesday morning. The company has a market capitalization of $ 14.2 million. Its stock has fallen 56% this year.

Stein Mart operates 281 stores in 30 US states, according to its website.

More than 40 retailers filed for bankruptcy in 2020, including home chain Pier 1 Imports, department store operators Neiman Marcus and JC Penney, and clothing brands J.Crew, Brooks Brothers and Ann Taylor, owner of Ascena Retail Group. Analysts expect this list to continue to grow during the holiday season, as businesses that were already struggling before the Covid-19 crisis are taken to extremes.

Some are emerging from their restructuring as small businesses, with fewer stores and new owners.

America’s largest shopping mall owner Simon Property Group and clothing licensing firm Authentic Brands Group, for example, won a competition to acquire high-end menswear chain Brooks Brothers out of bankruptcy and keep at least 125 Brooks branches. Brothers open.

The bankrupt Sur La Table kitchen accessories chain has been bought out for almost $ 90 million and plans to keep at least 50 stores open.

“There is an appetite [for bankrupted retailers] and we see it, ”said Perry Mandarino, head of restructuring and co-head of investment banking for B. Riley FBR. If you have a good brand and if you have a good, loyal customer base, you will have interest and you will survive. ”

Stein Mart brought in Foley & Larder as restructuring advisor, Clear Thinking Group as restructuring advisor and PJ Solomon as investment banker.

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