Stein Mart Inc. said Wednesday that it had filed for Chapter 11 bankruptcy protection and suggested it would likely be liquidated.
The discount chain operates 281 stores in 30 states, concentrating primarily on the South and Texas, and sells clothing, accessories, home decor and shoes at low prices compared to department stores. But while low-price retail as a whole has boomed in recent years (elevating T.J.Maxx and the owner of the Marshalls, TJX and Ross stores), Stein Mart has not been able to take advantage of the same growth.
Stein Mart has been struggling for years and never showed its peers’ ability to find good buys and enough new products.
In the company’s first quarter, when the impact of the epidemic was strongest, total sales were down 57.3% from the previous year. But when the depth of that decline was new, the broader trend was not: sales declined like each in the last four fiscal years, and retailers reported net losses for each of those years. Last year, total sales were $ 1.24 billion.
Chief Executive Officer and Chief Financial Officer Hunt Hawkins said in a statement, “The company has determined that the best strategy to maximize value would be to set aside its assets for the organized closing sale of the deal.” “The company lacks sufficient liquidity to continue operating in the normal state of business.” He suggested that some stores may continue to operate under the new owner.
The bankruptcy follows a long string of retail Chapter 11 filings so far this year as the pandemic has pushed already weak retailers to the limit. Among them are J.C. Penney, Neiman Marcus, J.Crew, Stage Stores, Brooks Brothers, and Pier 1 Imports.
