Steve and Barry's files for bankruptcy

It's a dark day for bargain-savvy college students across the country.

Steve and Barry's -- whose low price and rapid expansion made it a poster child for success in innovative retailing just a few weeks ago -- has filed for bankruptcy. The company is eliminating 172 corporate jobs, but plans to keep its 276 stores open while it continues its search for a buyer.

But according to The New York Times, "If a deal is not reached with another retailer or investor, the company will most likely begin to close some stores, and it still faces the possibility of a total liquidation." I still think there are a number of companies that should consider making a bid for the company, including Wal-Mart Stores, Inc. (NYSE: WMT), which could use it as an entry into the wallets of cost-conscious college kids, and Sears Holdings Corporation (NYSE: SHLD), which is rumored to be interested in acquiring some of the company's brands.

But if the 126 comments left on one of my recent posts on Steve and Barry's problems are any indication, whoever decides to buy them will have a lot of work to do in the employee morale department. People identifying themselves as employees were upset with the lack of communication in recent weeks and the company is also accused of stiffing many of its vendors.