The incredibly rapid fall of discount clothier Steve & Barry's continues.Newsday is reporting that the company told the bankruptcy court that it has no available cash or financing, and that it needs proceedings to be streamlined so it can sell its assets by July 31st. Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail and investment banking firm, told Newsday that the move is very unusual, and that it speaks to the tightness of the credit markets and the terrible state of Steve and Barry's finances.
The asset sale will be interesting -- many of the stores will be closed and it's possible that all of them will go. But Steve & Barry's model of ultra low-priced young adult-oriented apparel has value, as do its licensing deals with Stephon Marbury, Ben Wallace, Venus Williams, Bubba Watson, Amanda Bynes, Sarah Jessica Parker, etc. Wal-Mart Stores, Inc. (NYSE: WMT), Sears Holding Corporation (NYSE: SHLD), and every other retailer looking for inroads into the college demographic should be taking a look at this one. Acquisitions rarely create value, but buying this one off the scrapheap would likely entail very little risk.
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