The Wall Street Journal reports (subscription required) the company "is set to announce this week it will go out of business, according to two people familiar with the situation." All 5,000 employees will be let go after the liquidation, and the company's brand will probably be sold for next to nothing and live on in a much reduced capacity. For example, I could see Wal-Mart (NYSE: WMT) acquiring the brand to bolster its value-oriented fashion proposition.
What's disappointing is that the Steve & Barry's concept -- reasonably fashionable apparel at ridiculously low prices -- resonated with consumers and was delivering strong sales growth in an extremely difficulty retail environment. With a less ambitious expansion strategy, the company might well have survived and had a bright future.
For now, it's a case study in the dangers of excessive debt and overly rapid expansion.