Stein Mart joins the growing list of retailers to file for bankruptcy amid the ongoing coronavirus pandemic.
The off-price department store, which filed for Chapter 11 bankruptcy relief in a Jacksonville, Fla., district court, expects to close the majority — if not all — of its 281 stores, which are spread across 30 states. The retailer has also begun store-closing and liquidation sales and is considering the sale of its e-commerce business and related intellectual property.
“The combined effects of a challenging retail environment coupled with the impact of the coronavirus [COVID-19] pandemic have caused significant financial distress on our business,” Hunt Hawkins, chief executive officer and chief financial officer of Stein Mart, said in a statement. “The company has determined that the best strategy to maximize value will be a liquidation of its assets pursuant to an organized going out of business sale. The company lacks sufficient liquidity to continue operating in the ordinary course of business. I would like to thank all of our employees for their dedication and support.”
The law firm Foley & Lardner is advising Stein Mart, with the use of investment bank PJ Solomon and Clear Thinking Group acting as its restructuring adviser.
The news comes just months after Stein Mart’s board approved a motion to take the retailer, which sells apparel, accessories and footwear, in addition to home decor, off the public market in an effort to increase shareholder value.
Even so, Stein Mart — like so many retailers — was forced to close all of its stores in mid-March to prevent the spread of the coronavirus. Stores did not begin to reopen until late April. The company furloughed the majority of its associates and reduced executive pay by 20 percent. But it wasn’t enough to offset losses. Stein Mart lost nearly $66 million in the most recent quarter as topline sales fell to $134 million, down from $314 million a year earlier.
But it’s not just Stein Mart that is reeling from the global health crisis. Tailored Brands, Lord & Taylor, J.C. Penney, J. Crew and Neiman Marcus Group are just some of the retailers that have filed for bankruptcy this year alone.
Shares of Stein Mart fell nearly 48 percent at the start of Wednesday’s trading session after the company revealed its bankruptcy plans. The company’s stock is down about 79.5 percent year-over-year.