After a meteoric rise followed by a swift decent into bankruptcy, Steve & Barry's caught a lifeline when Bay Harbour Management LLC agreed to purchase the company's assets back in August. Bay Harbour hoped to keep 150 of the company's 276 store open. But the sagging economy appears to have dashed those plans.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.











Reader Comments (Page 1 of 3)
11-18-2008 @ 1:13PM
Your Avon Lady said...
Can we say Starbucks? I don't know why people think they can open so many stores so fast. I think Gordan Ramsey said it best, "Get your first one going really strong before you look to a second one."
11-18-2008 @ 2:19PM
Tom said...
Shame. The only store I bought clothes from. For 7.98, I could buy work pants that lasted just as long as Old Navy, etc. Got my daughter a thick winter coat there two years ago, it still looks new. Just paid 30.00 to replace it, that was on sale.
11-18-2008 @ 2:28PM
jim said...
The thing about Steve and berry's is that I dont know anyone who could fit their heads threw the neck holes on the shirts and sweat shirts .They made them for people with tiny heads.I have a normal sized head too. If you notice people with cuts on the neck of their sweatshirts you can bet $ they got them at Steve and berry's
11-18-2008 @ 2:37PM
Kimberly said...
A Steve and Berry's opend in the mall in a town we used to live in.. my sons were thrilled so we went and bought them logo tee shirts for 5 bucks and some other things.... washed the tees once they shrank and the decals washed off of them.. We never went back.. some times cheap is just that CHEAP in all aspects.. I felt bad for the teens who worked hard to earn any money who spent it there.. they were wear once and throw them out junk.
11-18-2008 @ 2:42PM
monica said...
lol, yes Jim i know what you mean. the sizing scale of their clothes was really weird. every thing bought there fit strange.
11-18-2008 @ 3:03PM
kris said...
Their clothing was cheap, shoddy, and fell apart after only 2 or 3 wearings. Not to mention the odd sizing that ran VERY small. I'm a M, and sometimes, an XL barely fit. Ridiculous.
11-18-2008 @ 3:10PM
Steve said...
Our family bought quite a bit of stuff from Steve and Barry's and it was reasonably good quality. My wife bought several items from the Bitten line that were quite nice. What aggravated me was that we wanted a pair of Amanda Bynes's skinny jeans and they never stocked them. Plenty of bootcut, but no skinny. Repeated emails to customer service as to why never got much of an answer. I guess they were just strapped and couldn't get stock. Too bad.
11-18-2008 @ 3:11PM
pr said...
never heard of them, must be and east coast thing, to many malls and alot of empty stores in all of them
11-18-2008 @ 3:15PM
mzsinsational said...
You know I am sad to see this store go. If I wanted to pay 100 dollars for shoes I could...FOR ME THAT IS...But I have 3 kids and this store was a nice change of pace..I am not saying the clothes are top quality, but they are cheap enough that if I wanted to buy another one, I could buy it for the whole family and not just for 1....This store was aimed for parents trying for their kids. Not for people who can afford more, and want more. I hate to see the stores go.
11-18-2008 @ 3:44PM
Voice of da FANS said...
This truly sucks but not a surprise. Lots of malls are going to be hurt with this. S&B was a huge new anchor to the Biltmore Square Mall in Asheville.
11-18-2008 @ 4:08PM
Elle said...
This store had a lot of really cheaply made crap.
When SJP put her line there, it was so cheap, like SJP would wear it, when she makes millions, yeah right.
Much better quality at Old Navy & on sale they are same prices.
11-18-2008 @ 4:23PM
bouncer827 said...
I am particularly going to miss their Rocky Road Ice Cream. Had the biggest chunks of chocolate I had ever seen.
11-18-2008 @ 4:24PM
horta said...
They should have never gone into the malls and should have stuck to what they did best and successfully for many years, college and university logo apparel (T-shirts, shorts, sweatshirts, sweatpants, hats, and an occasional jacket) in stores within walking distance of colleges and universities. They would sell 5 for the price of one and several friends could have a college T-shirt or you could have several. Great for students on a limited college budget.
11-18-2008 @ 4:26PM
ira said...
More layoffs announced every day! Will it be your employer tomorrow? Everyone! Every single one of us should always be prepared for a layoff. CASH! Piles of cold hard cash is the best way to weather the current economic situation. I discovered one of the best books you'll ever find about finance, "How to Become Filthy Rich on Your Current Income" at www.how-to-become-rich.com. If people read books like this one we would not have the current situation we do.
11-18-2008 @ 4:36PM
Blanche said...
Steve & Barry are happily enjoing another anniverasary together and it's too bad that their business failed.....Be good my lovies!!Aunt Blanche Sweetly...
11-18-2008 @ 4:43PM
Foshizzle said...
I hope Circuit City gets bought out my the Mexican billionaire who is after them - I would hate to see their stores go too, they really have some good stuff and a great website to order from and pick up in store. Steve and Barry's was unfortunately one of those flukey places - it did well at first, but then the stuff seemed to get poorer in quality and I didn't bother to go there any more.
11-18-2008 @ 4:51PM
horta said...
At the time I bought them in the college store about 10 years ago they were using normal brands, Fruit of the Loom, Haynes, etc, for the T-shirts and not fall-apart stuff. The logos are still clear and bright.
11-18-2008 @ 4:52PM
J~ said...
The place was a junk store~~~~JUNK JUNK JUNK.........I say Goodbye ....
11-18-2008 @ 5:24PM
Fortune said...
I'm sad about this, because it was a good concept. But, I can see at least partly why they went under: the store nearest me didn't sell skirts, and only sold a few dresses. I went there recently looking for a skirt for a special occasion, and couldn't find ANY skirts, much less for that. They didn't sell some items people need, like skirts. It was mostly shirts in there. That didn't make sense. You can't just eliminate an entire set of clothing, like skirts and dresses.
11-18-2008 @ 5:27PM
MKA said...
I've bought a couple of things there, but wondered how long their business model could survive selling everything made cheaply in China, but obviously taking much, much less of a profit margin than any other retailer. Boy, these are going to be some HUGE holes to fill in malls everywhere.