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.
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Reader Comments (Page 3 of 3)
11-19-2008 @ 10:50PM
Nikki said...
The problem here is that they started advertising with big name people Sarah Jessica Parker for one. When they started using named people to advertise they raised their Prices. That was the first mistake. Then they started opening stores where every business before it never made it. Yes, a whole lot of malls on the East Coast are just empty walking places with little stores. It makes you wonder if people get that greedy that fast and just act without thinking. Soon all we will have in America are Walmarts.
11-19-2008 @ 11:09PM
Jady said...
I'd only shopped there once, at the "liquidation sale" when this particular location was supposedly NOT going out of business... that being said, I found their clothing cheaply and poorly made, with cheap fabrics, shoddy seamwork, and odd fitting sizes (Mens Polos wide enough to wrap a semi with!)
I didn't think this "We're staying in business" thing would last... and I was right.
11-20-2008 @ 12:03AM
bree5433 said...
I DON'T KNOW WHY THEY FILED BANKRUPCY THEY HAD NO OVERHEAD COST IN THEIR HEADQUATERS.SOME OF THIER STUFF WAS NICE AMANDAS LINE
AND SARAH PARKERS AND NOT TO FORGET THE TWINS AND STARBERRRIES
11-20-2008 @ 9:47AM
jgon said...
they raised prices and that led them to the down fall. You could buy clothes with better quality and the same price at other stores.
11-21-2008 @ 8:49PM
Blixster said...
Hmm... you want to know why they went under? Here's a short synopsis.
They over-expanded too quickly, over-purchased too much cheap product that didn't sell quick enough to produce an appropriate intake, they swipe-swipe-swiped like crazy from vendors without paying them back or having the money to pay them back (check out each store, we each have like a bajillion expensive tv's amongst other expensive fixtures and such), the training for management was a joke, like literally there was a slight bit of training and more fun than work (which is good to a point, but I think it got overexaggerated), the manager/employee turnover was/is HORRIBLE, and because of the quality of the clothes (and trust me, I've worked here for years, and I know EXACTLY the quality that is associated with the clothes) is definitely something that could be defeated by anything from the clearance aisle from Salvation Army or Goodwill.
Now don't get me wrong, I love the people I grew up with, and I actually opened my store (and will be closing with it too) - I put hard work, both physical work and mental anguish, into my store and a few others in my district. Steve and Barry's, while a great concept, was run by a bunch of harvard graduates with MUSIC DEGREES, not ever contemplating the long-term reactions to their sudden impulses and decisions.
We will be closing all of the stores soon, but we have had no communication in nearly a month. We all received our closing signage today, which we will put up after we hear (IF WE HEAR) from the "corporate directive" which is to take place on Monday afternoon.
So, basically, good concept, bad management, good ideas, bad process to carry such ideas out.
Research it some more or visit your local steve and barry's for more information. I'm sure anybody at any of these stores (especially stores that have been in the "going out of business" process for a few months now) would be glad to bitch and moan and let you know alllllllll you want to know regarding our company/companies.
~Blix, Keyholder, Store 186.
11-22-2008 @ 5:29PM
Larry said...
I was with S&B at the beginning in their Great Neck office. Barry bragged that he could just not pay a vendor and demand the invoice cut in half. He giggled when he said that while putting the long running loyal vendor out of business. He always said they needed to open twice the amount of stores to support the current ones. I thought a Pyramid scheme. So I ask what will happen when we can't open enough stores. He giggled again. This is the bent mind behind S&B.
Steve Shore and Barry Prevor have always had one business plan. TAKE TAKE TAKE.
They took your souls, efforts, and careers and trashed them. They took vendors for all the could. They took $7.98 from customers for product worth about 98¢.
The sickness didn't stop their. Doug T the new owner promised bonus money to anyone who passed up opportunities to stay with S&B til January and then laid off over 125 people without warning and labeled them PART TIMERS to avoid severance pay. This violates the WARN ACT. There is a DVD floating around showing Doug T at a Monday Morning Meeting saying he will save them.
So to anyone who thinks this was a good company you are so mistaken.
12-12-2008 @ 3:59PM
Allie said...
good riddance. This store was just full of cheaply made garbage. Spending $7 for a shirt is not a deal when the logo washes away in a few washes. Spend $15 for a better quality shirt that will last longer. None of the clothes here EVER fit well or held up after even one wash. Stuff was so poorly made you could see the uneven stitching and stuff. Those of you mourning S&B, just go to Old Navy when they're on sale; their clothes are high quality and inexpensive. GOOD RIDDANCE STEVE & BARRY'S.
12-15-2008 @ 8:43PM
Mike said...
I see all the negative comments about the merchandise. Everone is entitled to their opinion. I had a very good experience with their clothes. I loved their wool belnd sweaters and am still wearing five year old sweaters from them. Plus I am a big man --size XXL.
Oh well!!
12-20-2008 @ 9:48PM
stghm said...
Although it is probably really hurting the mall (several stores are closing, and the mall is going bankrupt) I never liked this store.
My mom bought me a backpack from here years ago, it fell apart after just a few days of normal use. I expect a backpack to last at least a year. I took it back and I could only exchange it, I did this several times before asking for store credit. Which they did not offer.
Later on, I got a sweatshirt from there, which ripped at the seams within a week. I had them take it back.
I despised that store for selling such cheap crap. Steve and Berry's makes Target look like Bloomingdales.
1-09-2009 @ 9:40AM
Lori said...
I just read about Steve and Barry's closing and am so disappointed. I've been shopping there for my kids for a few years now and love the prices. I remember when they were mainly a store for selling items with college logos and my then junior-high boys were thrilled to get logo shirts that we could afford. And now my teenage daughter loves the Sarah Jessica Parker and Amanda Bynes lines. I guess it was too good to last...
1-13-2009 @ 9:50PM
Seattlite said...
I'm a bit confused here the Steve & Barry's site says only some are closing. I'm hoping that's true I've gotten some decent cargo Khaki's there and some of the shirts are just outrageous. I really hope they can stay afloat.
1-14-2009 @ 8:39PM
takenbysteveandbarrys said...
Count me and my family among those taken to the cleaners by S&B. Cleaned us out I am embarrassed to say. Left holding the bag, and the liens. Need some justice. Need the truth and the valuble info from the inside. Trying to hold them accountable but I am alone fighting Goliath. Will you help? Will anyone help? We can even discuss a cash reward for info that leads to recovery what they stole from us. If you want someone to hold them accountable look no furhter. I am on it but need help. Contact me directly at takenbysteveandbarrys@yshoo.com
1-14-2009 @ 8:42PM
takenbysteveandbarrys said...
Count me and my family among those taken to the cleaners by S&B. Cleaned us out I am embarassed to say. Left holding the bag, and the liens. Need some justice. Need the truth and the valuable info from the inside. Trying to hold them accountable but I am alone fighting Goliath. Will you help? Will anyone help? We can even discuss a cash reward for info that leads to me recovering what they tricked me out of. If you want someone to hold them accountable look no further. I am on it but I need help. Contact me directly @ takenbysteveandbarrys@yahoo.com.
2-12-2009 @ 8:58AM
ramgrad04 said...
I'm really going to miss Steve and Barry's...great prices, and everything I've bought there fits well and has held up after MANY washes, so I'm not sure what's up with all of the comments that say otherwise...
3-20-2009 @ 3:21AM
Krystle said...
I liked Steve and Barry's. I never had a problem with any of the clothes I bought there. I had bought some khakis for work that lasted a while. I was pretty hard on them, so I expected them to break down eventually.
My boyfriend bought tees and never had a problem with the logos washing off. We even bought some tees as xmas gifts one year for his little brothers, and they still wear them! He also bought jeans and two button down shirts over 2 years ago and he still wears them all. They lasted and still look good!