A Stein Mart location in Aventura, Florida, USA. Photo: William Power/Google Images
The Jacksonville, Florida-based retailer Stein Mart issued a statement on Wednesday, August 12 stating it plans to “close a significant portion, if not all, of its brick-and-mortar stores” and has “launched a store closing and liquidation process,” according to a news release announcing the Chapter 11 filing. The company said it would continue to operate throughout the Chapter 11 process. The company operates 281 stores in 30 states.
The retailer told USA Today in a statement that their going-out-of-business sale “is expected to begin in our stores August 14 or 15.”
The company is considering other things they could do to help their situation, such as maybe selling their eCommerce store and related intellectual property. But unfortunately it seems that not much can be done to help Stein Mart with their precarious situation. The coronavirus pandemic has made many businesses take a hit, financially and legally.
Department stores and apparel retailers have been grappling with declining foot traffic for years but the impact of the pandemic has led many retailers to accelerate store closings and bankruptcy filings. As many as 25,000 stores could shutter this year as businesses continue to feel the impacts of the pandemic, according to a recent report from Coresight Research. Stein Mart’s bankruptcy is one of many steps the company has taken to help them stay afloat among the competition during the pandemic.
CEO Hunt Hawkins said in a statement that the bankruptcy was an “extremely difficult decision.”
“In partnership with our financial and legal advisors, we engaged in a thorough analysis of all available alternatives before deciding on this course of action,” the statement said. “Ultimately, due to the combination of a challenging retail environment and the impact of COVID-19, we and our advisors determined that we will wind down the business.”
Once their merchandise is sold off, stores will close on a staggered basis, a company spokesperson told The Desert Sun in an email. They expect that to happen later this calendar year. Each store employs an average of 30 workers. The shocking decline of foot traffic in retail stores and slow sales has provided more fuel to online retailers already swiping market share away from malls that were relying on diminishing foot traffic to apparel shops and department stores in particular.
Stein Mart’s stock price has fallen throughout the year, dropping from $0.67 when the year started to $0.29 on Tuesday, August 11. The stock fell on August 12 to $0.17. The company said in June it had landed $10 million in aid through the federal Paycheck Protection Program but the business acknowledged last week that it had laid off a number of employees at its Southbank headquarters.
Originally founded in Mississippi in 1908, Stein Mart became a regional retail power in the 1970s and had grown to more than 100 stores in the 1990s, but has struggled like many retailers as the shopping environment changed. The publicly traded company’s board agreed in January to be taken over by a private company, but that deal with Kingswood Capital Management, That agreement reached a standstill once the COVID-19 global pandemic hit the United States back in March.
William is the Managing Editor at FloridaInsider.com. His years of experience in journalism, broadcasting and multimedia include roles as a Writer and Web Producer. He graduated from Florida International University with a Bachelor of Science and Communication.