Miami-based Retail Ecommerce Ventures became the winner of a Stein Mart bankruptcy court auction for intellectual property, the company said Wednesday. It will pay $ 6.02 million for the Stein Mart nameplate, as well as its private labels, domain names, social media assets and other customer data.
Stein Mart, based in Jacksonville, Fla., Filed for Chapter 11 bankruptcy protection in August, but ultimately closed all of its 281 stores.
REV, founded last year by CEO Alex Mehr and Executive Chairman Tai Lopez, plans to revive the low-cost clothing and home business, which was in competition with stores like Ross Stores, Home Goods, Marshalls and Burlington Stores, as an online store. store only at the beginning of next year.
The low price industry in the United States takes advantage of buyers who enjoy the pleasure of rummaging through piles of merchandise for bargains. But the Covid pandemic dealt a heavy blow to those retailers, including Stein Mart, which was already struggling with debt overhang. Then its sales dried up during the temporary store closings in the spring.
REV expects low-cost retailers to rebound strongly after a Covid-19 vaccine becomes widely available. And Wall Street seems to share that sentiment, as shares of non-price retailers rally. Shares of TJX companies are up 27% from a month ago, while shares of Ross are up 30%. Burlington shares have risen nearly 14% in the past month.
“Every time you see the big 800-pound gorilla competitor, like TJ Maxx, you know he’s doing something right,” REV’s Lopez said. “We want to be kind of an online version. ”
However, low-cost retailers have been slow to move online. Marshalls, which is owned by TJX, only launched a website last year. And last month, TJX announced that it would add an e-commerce site for its HomeGoods furniture chain in 2021.
REV hopes to fit into this growing digital landscape, by tapping into a loyal Stein Mart customer base in the Southeast, Texas, Arizona and California, where the company’s stores were largely based, has Lopez said.
“It’s multigenerational,” he says. “Stein Mart is definitely well known. ”
The advantage of REV is its e-commerce experience. He has built a portfolio of fallen retail brands and brought them new life on the internet.
There have been plenty of brands to choose from, as the Covid pandemic has pushed many retailers already struggling to bankrupt. REV purchased the e-commerce operations of Pier 1 Imports and the brand assets of Modell’s Sporting Goods. He also owns Dressbarn, Linens’ n Things, collectibles retailer Franklin Mint and UK bookseller The Book People.
In November, it purchased the rights to the RadioShack brand in the United States, Canada, India, Australia, Europe and China, along with its related websites, for an undisclosed amount.
REV said its brands now generate more than $ 1 billion in sales each year.
“I’ve always been a huge fan of Warren Buffett and his strategy of just acquiring things that are already there rather than building from scratch,” Lopez said. “And in 2019, we started seeing the writing on the wall with the so-called retail apocalypse. ”
REV is also not the only one to bid on distressed retailers. But for now, he’s sticking to online offers only.
“We didn’t go too far in finding bricks and mortar,” Lopez said. “There is a lot to do online. Look at Amazon. ”
In this way, it differs from clothing licensing firm Authentic Brands Group, which partnered with America’s largest shopping mall owner Simon Property Group this year to buy out Lucky Brand and Brooks Brothers from bankruptcy. ABG also owns brands such as Juicy Couture, and allows them to be sold in other retail stores.
Lopez said he is looking for other deals and hopes there will be acquisition opportunities after the holidays.
“Retailers are going to look at their vacation numbers and they have all of these leases owed,” he said. “There will be blood in the streets again, without a doubt. ”