Bankrupt Steve & Barry’s wants to make short work of a reorganization or sale, and lack of cash as it nears the important back-to-school season is a big reason.
The company, which filed for Chapter 11 protection on Wednesday, is seeking Manhattan bankruptcy court approval for an expedited hearing for an approval of procedures in connection with the sale of all or most of its assets.
The retailer wants a hearing on bidding procedures on July 16; an auction on July 29, and a hearing to approve any sale on July 31. Steve & Barry’s said in court papers that business reasons support a timely resolution of the auction, citing fluctuation in revenue depending on the selling season. It said the b-t-s season that begins in early August is a significant selling period at retail, and holding a sale before the start of b-t-s sales is “critical to ensure that any inventory sale yields the highest and best return for all stakeholders.”
Also critical, the retailer said, was that it entered Chapter 11 “with no unencumbered cash and no debtor-in-possession financing. Without any cash, the debtors cannot replenish their inventory and, therefore, the value of their business is declining on a daily basis.”
The firm is operating with limited access to cash from sales of liquid assets while in bankruptcy, subject to liens of lenders General Electric Capital Corp. and PrenSB.
Court papers said that as of May 31, the Port Washington, N.Y.-based retailer of cheap, chic apparel, footwear and accessories had consolidated assets of $693.5 million and liabilities of $638 million.
Consolidated revenues for the 12 months ended May 31 were $656.6 million, well below the figure of $1 billion or more estimated by market sources before the filing. The company said it employs about 8,600 domestic employees and 1,100 internationally.
About 7,300 are part-time hourly workers and 1,300 are full-time employees. The company slashed 172 corporate and field positions on Wednesday.
In the court papers, Steve & Barry’s said its retail locations serve “economically challenged areas that other retailers have abandoned because of household income levels, population trends or crime rates.”
The company operated 276 stores in 39 states at the time of the filing.
During its expansion, the retailer diversified its business beyond licensed collegiate apparel and lifestyle brands to include private label casual apparel and accessories for men, women and children, and exclusive celebrity-branded lines of apparel, the best known of which are Bitten by Sarah Jessica Parker, and Starbury from Stephon Marbury. The company also has celebrity and media licensing arrangements with Amanda Bynes, Venus Williams and CBS Consumer Products.