Mike Duke, chief executive officer of Wal-Mart International, has been selected by the company’s board to succeed Lee Scott as president and ceo of the world’s largest retailer.
This story first appeared in the November 21, 2008 issue of WWD. Subscribe Today.
The appointment is effective Feb. 1.
Eduardo Castro-Wright, ceo of Wal-Mart Stores U.S., will be vice chairman of Wal-Mart Stores Inc., effective immediately.
For complete coverage, see Monday’s WWD.
Steve & Barry’s Files for Bankruptcy: Plan B didn’t work out as planned.
Liquidation sales have begun at Steve & Barry’s, which late Wednesday filed for bankruptcy less than five months after its initial bankruptcy court petition. The difference this time is that there’s no bailout or white knight for the retailer: the exit strategy is to liquidate and shutter all 173 of its remaining stores — which is likely to result in significant losses for new owners Bay Harbour Management and York Capital Management. The two funds bought the retailer out of bankruptcy in September for $168 million.
The firms recruited Hal Kahn, former chief executive officer of Macy’s East, out of retirement last month to serve as ceo. Kahn left earlier this week after not even a month on the job.
According to bankruptcy court documents filed in a Manhattan bankruptcy court, the retail chain was unable to get additional financing in the current economic environment.
The Port Washington, N.Y.-based retailer has featured licensed celebrity and athlete collections such as Bitten by Sarah Jessica Parker, Dear by Amanda Bynes, Eleven by Venus Williams and Starbury by Stephon Marbury. Steve & Barry’s filed for Chapter 11 under the name BH S&B Holdings. According to the voluntary bankruptcy filing Wednesday, the retailer is seeking to hire RAS Management Advisors to conduct the liquidation and wind up corporate affairs. A joint venture group consisting of Great American Group, SB Capital Group, Tiger Capital Group and Hudson Capital Partners — the same group that is managing the liquidation of Mervyns — will handle the going-out-of-business sales at the store level.
“For more than 20 years, Steve & Barry’s has been a college-town landmark for quality, casual apparel at great value,” said Jim Schaye, president and ceo of Hudson Capital. “We are anticipating the merchandise to move quickly, as the sale offers consumers an excellent opportunity to buy great holiday gifts at substantial discounts.”
The Steve & Barry’s liquidation sale, which began Thursday, includes all remaining stores, with inventory valued at approximately $240 million, Schaye noted. In September, the new owners disclosed plans to shutter 103 of the chain’s then-276 stores.
The filing said when BH S&B Holdings purchased the retailer, it planned to operate certain Steve & Barry’s stores and liquidate inventory at other locations. However, because of the financial crisis and a slowdown in consumer spending, revenues dropped and Steve & Barry’s was not in compliance with certain covenants under its secured credit facility.
The retailer expects store closing sales would conclude within the next two months.
Steve & Barry’s estimated total assets at between $100 million and $500 million, and total liabilities in the same monetary range.
Among its top unsecured creditors are: Gildan Active Wear Srl, Montreal, $418,200; Safari Apparels, Surat, Gujarat, India, $410,112; Lotus Clothing, Bangalore, India, $301,307, and Sinomax International, Ho Chi Minh City, Vietnam, $294,199.
The Steve & Barry’s business model first collapsed in July when its razor-thin margins were squeezed even more by tight credit and the reluctance of shoppers to either drive or spend.
At the time, the troubled retailer of low-priced chic apparel and footwear defaulted on a $197 million asset-backed loan from GE Commercial Finance Corporate Lending. A feverish search for $30 million in needed financing ensued, but those efforts failed.
But, at the time the retailer was bought out of bankruptcy, sources questioned whether it had a strategy that could survive the economic downturn. According to sources, some of Steve & Barry’s stores had revenues of less than $100 a square foot, barely enough to cover the costs of operating and staffing the units.�