I love me some bargains. When you clothe four kids, shopping can be more of a mission than a chore. So the first time my wife and I wandered into Steve & Barry’s at Crossroads Mall, we felt like we had found the Holy Grail of back-to-school savings.
Three T-shirts for $15? Sure, they were a bit thin, but the kids loved the graphics and snarky catch phrases.
A winter coat for $12? It only has to last until she outgrows it because there are no other girls to accept pink hand-me-downs.
$15 for sneakers? I think I welled up a bit when I first saw the Starburys.
But Steve & Barry’s has filed for bankruptcy, and although the company plans to reorganize, the Wall Street Journal reports that finances may force a liquidation.
The newspaper also explains how the company may have been able to sell its apparel so cheaply — they didn’t make any profit on their sales. Steve & Barry’s produced much of its revenue from incentives paid by mall owners seeking anchor clients.
For the 2003 fiscal year, which ended Jan. 31, 2004, when Steve & Barry’s had 31 stores, tenant-improvement payments totaled $17.5 million, according to documents reviewed by The Wall Street Journal. The payments jumped to $58.6 million the next year, the documents say. The peak came in the 2006 fiscal year, when the company received $122.3 million in payments, but spent only about $59 million to build out new stores, leaving about $63 million in unused cash, the documents indicate. From fiscal years 2004 to 2007, the company received $380 million of payments.
The company says it will keep its stores open for now, honor all its gift cards and continue selling the same merchandise. But if I had a Steve & Barry’s gift card, I might redeem sooner rather than later. Holy cow, the Starbury’s are marked down to $9!
Don Mecoy
Business Writer