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Stein Mart Inc. said on Wednesday it had filed for Chapter 11 bankruptcy protection and suggested it would likely liquidate.
The discount chain operates 281 stores in 30 states, focusing most heavily on the South and Texas, and sells clothing, accessories, home decor, and shoes at low prices compared to department stores. But while off-price retail as whole has boomed in recent years—lifting T.J.Maxx and Marshalls’ owner TJX and Ross Stores—Stein Mart has not been able to tap into the same growth.
Stein Mart has been struggling for years and never showed its peers’ knack for finding good buys and sufficient new product. “It lacks the scale of Ross, the buying savvy of T.J.Maxx, and the fashionability of Nordstrom Rack,” is how Neil Saunders, managing director of GlobalData Retail, put it in a research note.
In the company’s first quarter, when the pandemic’s impact was the strongest, total sales declined 57.3% from a year earlier. But while the depth of that drop-off was new, the larger trend was not: Comparable sales declined in each of its last four fiscal years, and the retailer posted a net loss for each of those years. Total sales were $1.24 billion last year.
“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,” CEO and CFO Hunt Hawkins said in a statement. “The company lacks sufficient liquidity to continue operating in the ordinary course of business.” He did suggest some stores could continue to operate under a new owner. Stein Mart is also looking to sell its e-commerce business.
The bankruptcy follows a long series of retail Chapter 11 filings so far this year as the pandemic has pushed already weak retailers over the edge. Those have included J.C. Penney, Neiman Marcus, J.Crew, Stage Stores, Brooks Brothers, and Pier 1 Imports.
