Off-price specialty retailer Stein Mart, Inc. filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Middle District of Florida, Jacksonville Division amid a challenging retail climate and the pandemic, the company said in a statement.
“The combined effects of a challenging retail environment coupled with the impact of the Coronavirus (COVID-19) pandemic have caused significant financial distress on our business,” Stein Mart Chief Executive Officer Hunt Hawkins said in the announcement. “The Company has determined that the best strategy to maximize value will be a liquidation of its assets pursuant to an organized going out of business sale.”
Stein Mart said it filed motions with the court that would allow it to stay in operation, including continuing to provide staffers with their wages as well as benefits, with the court's approval. The motions would also allow for vendors and suppliers to be paid “in the normal course of business” and cash collateral to be utilized.
The company said it is looking into “any and all strategic alternatives,” such as a possible sale of its online shopping operation and the intellectual property related to it. It also foresees to close a number — if not each one — of its physical locations.
Clear Thinking Group LLC is the company’s restructuring advisor, Foley & Lardner LLP is the company’s restructuring counsel and PJ SOLOMON is the company’s investment banker.
Stein Mart, which provides brand-name décor, clothing, footwear and accessories at discount prices, runs 281 retail locations throughout 30 states.
In July, Ascena Retail Group, Inc. filed for Chapter 11 in federal bankruptcy court in Virginia. The merchant, along with “certain of its subsidiaries,” had arrived at a restructuring support agreement (RSA) with over 68 percent of secured term lenders per news at the time.