Stein Mart Inc. is looking for options.
After shares of the company dropped 36 percent to 72 cents Monday, the Jacksonville, Fla.-based retailer said it would assemble a team to “improve performance and explore strategic options.”
The stock drop left the company’s market capitalization at just $54.2 million, while total debt stood at $150.8 million, according to S&P Capital IQ.
Stein Mart said a “special committee appointed by its board of directors, together with management, have assembled a team to explore all opportunities to improve operating performance and identify potential strategic alternatives.”
The company has retained PJ Solomon as its investment banking and financial adviser and had already hired Alvarez & Marsal to look into its operations for areas that could be improved.
“Given the continuing challenges of the retail environment, it is prudent for us to review our strategic options while focusing on ways to improve our business,” said Hunt Hawkins, chief executive officer.
There is no timetable search for options and the company said it “does not intend to disclose further developments unless and until the board of directors’ special committee has approved a specific transaction or otherwise determined that disclosure is appropriate.”
The 293-door off-price retailer said in November that its profits for the first nine months of the year tallied $23.9 million as sales slipped 4.2 percent to $933.8 million.
At the time, Hawkins sounded some notes of optimism and said the comparable-store sales trend improved during the quarter, ending with a flat result in October, when traffic was slightly positive.
“Operating with lower inventory levels is resulting in better merchandise margins from increased regular-priced selling and lower markdowns,” Hawkins said. “Now that we have moved past the disruptions of hurricanes Harvey and Irma, we expect the progress we are making with our business to be more apparent in the fourth quarter. As we continue to operate with lean inventories and reduced spending, our borrowings will be even lower by the end of the year.”
The holiday season provided relief for many retailers after a tough go of it in 2017, but some struggling chains found that the tough slog continued.
Bon-Ton Stores Inc., for instance, has been negotiating with its creditors in an effort to get its capital structure adjusted so it can implement its turnaround plans.