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Cornelius News

Stein Mart closing for good today

Missing Stein Mart already: Nothing left in Men’s

Oct. 26. Stein Mart will officially close its doors in the Shops at Fresh Market in Cornelius tonight at 7. An associate at noon said the store was largely emptied out of merchandise.

The Jacksonville, Fla.-based company has filed bankruptcy. According to the filing, the problems in the retail industry began before the coronavirus. But the July resurgence in sank the ship, the bankruptcy filing said.

The demise of brick and mortar retailing was outlined by Stein Mart’s CEO Hunt Hawkins:

The retail industry has generally experienced difficult business conditions during the past several years. In general, retailers have experience decreased store traffic and have lost market share to fast-growing e-commerce retailers.

The declines in store traffic have been especially pertinent for apparel and accessories retailers, such as the Company, which have also experienced lower operating margins as a result. From 2016 through the present, the Company’s sales generally declined and the Company faced the difficult task of growing sales while significantly reducing expenses in a difficult retail environment.

The on-set of the COVID-19 pandemic, including the store closures and declined store traffic exacerbated the difficult retail environment. The Company’s initial shut-down in March 2020 in response to the COVID-19 pandemic materially, adversely impacted the Company’s revenues, liquidity, results of operations and cash flows, and its ability to pay vendors and landlords according to standard terms.

The Company may have been able to survive following the initial reopening of the stores with the support of its vendors, landlords and lenders. However, the July 2020 resurgence caused a second major decline in revenues and store traffic.

Other large retail bankruptcies, including Brooks Brothers, Lord & Taylor, Ascena (Ann Taylor), Tailored Brands (Men’s Wearhouse and Jos. A. Bank), Sur La Table, Lucky Brand, JC Penney, J Crew, Neiman Marcus, GNC, Stage Stores, Aldo, Pier 1, Tuesday Morning and RTW Retailwinds (New York & Co), caused vendors to become nervous and reluctant to sell new merchandise without payment in advance.”

Stein Mart will be missed.

Brand for sale

Retail TouchPoints is reporting that Stein Mart has hired Hilco Streambank to put the brand’s intellectual property up for sale. Hilco Streambank will receive a percentage of the proceeds from a potential sale. Depending on who purchases the IP, a sale may allow Stein Mart to come back to life via ecommerce or even brick-and-mortar stores, following the same path as once-defunct retailers Toys ‘R’ Us and Charming Charlie, among others.

Unsecured creditors

In the bankruptcy filing, the company said the liquidation sale will produce about $250 million, which is likely to be sufficient to repay secured creditors “but unlikely to produce any meaningful funds for other creditors.”