moegolden
07-14-2008, 06:29 PM
wow, just when I thought they were getting real cred ....i guess they found a way to "fuck up a cheese sandwich" by growing way too fast. i would think this leaves an opening for anyone who is willing to follow a similar model, at least to a point.
* Steve & Barry's, regarded just weeks ago as one of America's fastest-growing retailers, now qualifies as one of the industry's most unusual blowups. Mall owners courted the retailer with fat payments to outfit its cavernous stores. When the payments slowed, Steve & Barry's collapsed.
http://www.newsobserver.com/105/v-print/story/1140818.html
http://www.businessweek.com/innovate/next/archives/2008/07/steve_barrys_wh.html
newsday.com/business/ny-bzsteve0712,0,7593958.story
Newsday.com
End could be near for retailer Steve & Barry's
8:26 PM EDT, July 11, 2008
Steve & Barry's, the Port Washington-based retailer popular for its low prices and celebrity clothing lines, has no cash, no lender willing to provide financing and now few options except to sell its assets, court filings reveal.
The company, which filed for Chapter 11 bankruptcy on Wednesday, said it has "no available cash and no debtor-in-possession financing," dimming any prospects of its re-emergence from bankruptcy, retail experts said. Citing its dire circumstances, Steve & Barry's has asked the court to speed up the hearing to approve auction and bidding procedures, according to court documents filed Thursday. It also proposed that the auction take place on July 29 and that the sale approval hearing take place by July 31.
"The debtors believe that, absent a prompt sale, the value of their assets will rapidly decline because the debtors lack sufficient funding to continue operations, including the purchase of new inventory," the company stated in the filing.
That Steve & Barry's was not able to find debtor-in-possession financing -- financing that is considered relatively secure and that allows a company to continue its operations while it reorganizes under bankruptcy protection -- indicates the depth of the company's financial troubles and may also reveal how tight the credit markets have become, retail experts said.
"This is it," said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail and investment banking firm in Manhattan. "There's nothing else they can do. ... It doesn't look like there is any hope for reorganization."
Steve & Barry's declined to comment Friday.
In the months preceding the filing, Steve & Barry's did obtain millions in loans from lenders GE Capital Corp. and PrenSB Llc. GE provided Steve & Barry's with a $197-million asset-based loan, of which $135 million is outstanding, and PrenSB gave the company a $30-million loan. Both lenders have priority in claiming the company's assets, a factor that probably has left the retailer with little or no equity to secure another loan, a bankruptcy expert said.
"That they can't get debtor-in-possession financing means that they have nothing to give to the lender to secure the lender and make it feel comfortable," said Stuart Hirshfield, an attorney specializing in bankruptcy at Mintz Levin in Manhattan. The company's assets have liens that absorb most of their value, Hirshfield added. "There is no equity in those assets to be able to finance a debtor-in-possession financier."
GE, a known provider of debtor-in-possession financing, would have been the likely source for a bankruptcy loan, he noted. Because GE is not filling that role reveals that "they are not comfortable extending any more credit and that they think they are adequately secure in the current situation."
Court documents also indicate that the company earlier this year sought buyers.
"The situation speaks to the tremendous weakness of the company," Davidowitz said. "That you would instantly [be forced to] liquidate ... is fairly traumatic."
Copyright © 2008, Newsday Inc.
* Steve & Barry's, regarded just weeks ago as one of America's fastest-growing retailers, now qualifies as one of the industry's most unusual blowups. Mall owners courted the retailer with fat payments to outfit its cavernous stores. When the payments slowed, Steve & Barry's collapsed.
http://www.newsobserver.com/105/v-print/story/1140818.html
http://www.businessweek.com/innovate/next/archives/2008/07/steve_barrys_wh.html
newsday.com/business/ny-bzsteve0712,0,7593958.story
Newsday.com
End could be near for retailer Steve & Barry's
8:26 PM EDT, July 11, 2008
Steve & Barry's, the Port Washington-based retailer popular for its low prices and celebrity clothing lines, has no cash, no lender willing to provide financing and now few options except to sell its assets, court filings reveal.
The company, which filed for Chapter 11 bankruptcy on Wednesday, said it has "no available cash and no debtor-in-possession financing," dimming any prospects of its re-emergence from bankruptcy, retail experts said. Citing its dire circumstances, Steve & Barry's has asked the court to speed up the hearing to approve auction and bidding procedures, according to court documents filed Thursday. It also proposed that the auction take place on July 29 and that the sale approval hearing take place by July 31.
"The debtors believe that, absent a prompt sale, the value of their assets will rapidly decline because the debtors lack sufficient funding to continue operations, including the purchase of new inventory," the company stated in the filing.
That Steve & Barry's was not able to find debtor-in-possession financing -- financing that is considered relatively secure and that allows a company to continue its operations while it reorganizes under bankruptcy protection -- indicates the depth of the company's financial troubles and may also reveal how tight the credit markets have become, retail experts said.
"This is it," said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail and investment banking firm in Manhattan. "There's nothing else they can do. ... It doesn't look like there is any hope for reorganization."
Steve & Barry's declined to comment Friday.
In the months preceding the filing, Steve & Barry's did obtain millions in loans from lenders GE Capital Corp. and PrenSB Llc. GE provided Steve & Barry's with a $197-million asset-based loan, of which $135 million is outstanding, and PrenSB gave the company a $30-million loan. Both lenders have priority in claiming the company's assets, a factor that probably has left the retailer with little or no equity to secure another loan, a bankruptcy expert said.
"That they can't get debtor-in-possession financing means that they have nothing to give to the lender to secure the lender and make it feel comfortable," said Stuart Hirshfield, an attorney specializing in bankruptcy at Mintz Levin in Manhattan. The company's assets have liens that absorb most of their value, Hirshfield added. "There is no equity in those assets to be able to finance a debtor-in-possession financier."
GE, a known provider of debtor-in-possession financing, would have been the likely source for a bankruptcy loan, he noted. Because GE is not filling that role reveals that "they are not comfortable extending any more credit and that they think they are adequately secure in the current situation."
Court documents also indicate that the company earlier this year sought buyers.
"The situation speaks to the tremendous weakness of the company," Davidowitz said. "That you would instantly [be forced to] liquidate ... is fairly traumatic."
Copyright © 2008, Newsday Inc.