Goody's, the low-priced apparel chain that operates 282 stores in the Southeast, will be liquidating its entire operation. The company has 10,000 employees.

Goody's had no choice but to liquidate after it couldn't work out a restructuring plan with its creditors. The company has been operating under bankruptcy protection since June.

Goody's is now seeking bids to liquidate its inventory and other assets, and will likely be holding going out of business sales very soon.

The company also earns the distinction of being the first major liquidation announcement of 2009. Regardless of how quickly a recovery comes, there will likely be many more like it over the next few months. The winners of all these specialty discount retailers bankruptcies are stores like Wal-Mart (NYSE: WMT) and Target (NYSE: TGT). Goody's was probably a pretty feeble competitor even in its prime but the big box stores now have less competition than ever in the affordable clothing department.

Discount clothier Steve & Barry's has filed for bankruptcy twice over the past few months, and is not undergoing a total liquidation of all of its stores. But there's more drama still to be had.

The New York Post reports that New York City mega-landlord Jeff Sutton has sued founders Steven Shore and Barry Prevor, along with the company's CFO and real estate director for fraud, alleging that they misappropriated $1 million set aside for store improvements.

Lawyers for the creditors' committee are also looking into the company's methods for inventory accounting.

Steve & Barry's relied heavily on payments made by landlords for opening new stores in spots vacated by downsizing chains. The landlords were desperate for tenants, and were willing to make larger than usual allowances for renovation. But Sutton claims that the company collected $122 million from landlords but only spent $59 million on building new stores. The balance of the money, he claims, was inappropriately used for operating expenses.

This post is part of AOL Money & Finance's Best & Worst in Money 2008 feature.

As the economy slides into recession and struggling retailers and restaurants begin to lose the good fight, its inevitable that some favorites will disappear. Among those leaving us in 2008 are retailers Linens 'n Things, Mervyns, Sharper Image, and Steve & Barry's.

I always liked Linens 'n Things for its reasonably priced, reasonably stylish offerings of such functional things as kitchenware and linens, not to mention the occasional useless but chuckleworthy items such as dancing Santas and big plastic barrels of pretzels. But I admit that I didn't shop at the New Jersey-based big-box retailer very often. After Linens 'n Things went private in 2006, the chain's expansion was offset by declining same-store sales, and the company operated at a loss. It filed for Chapter 11 bankruptcy in May 2008, but in October said it would liquidate all remaining stores.

Being from the midwest, I've never shopped at a Mervyn's. It appears to have been a store with a bit of an identity crisis. It was acquired by Dayton Hudson in 1978. Beginning in the '80s, Mervyn's tried unsuccessfully to expand into Georgia and Florida. From 1996 to 2001, the name was changed to Mervyn's California to identify with its West Coast roots. Then in 2004 , Mervyn's was sold to private investors. Store closings became a regular occurence. In July 2008, the company filed for Chapter 11 bankruptcy. More store closings followed, and in October the company filed for Chapter 7 bankruptcy and began to liquidate its stores.

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.

Steve & Barry's, the college town clothier known for selling reasonably good quality clothing for under $10, will live to fight another day.

The Wall Street Journal reports (subscription required) that Bay Harbour Management LC will purchase the company's assets out of bankruptcy for $168 million, and has been negotiating "around the clock" to secure lease concessions from landlord, with the goal of keeping about 150 of the company's 276 stores operating.

"Value is king today," Bay Harbour managing principal Douglas Teitlebaum told the Journal. "The customer still wants to shop but they must get value, and this company offers better value than I've seen anywhere."

I think he's absolutely right. The company expanded far too aggressively, but its same store sales growth was strong, and its value proposition appears to resonate strongly with consumers. The continued operation of the stores will be a victory for college students all over the country who rely on the chain to dress well on a budget.

With most observers predicting that it was headed for liquidation, bankrupt discount clothier Steve & Barry's has found a buyer, according to The Wall Street Journal (subscription required).

The company has agreed to be acquired by turnaround firm Bay Harbour Management for $163, with Bay Harbour planning to operate the company as a going concern, contingent upon the ability to renegotiate leases with malls that house the company's stores.

But it's a little more complicated than that. Bay Harbour is the stalking horse bidder, which means that, assuming the deal secures bankruptcy court approval, the $163 million offer will serve as opening bid for an auction of the company's assets. If no one else steps forward with a high offer -- or one that is somehow better -- Bay Harbour will have its prize.

This is obviously fantastic news for the company's employees, suppliers and other affiliates, but in a larger sense, it's wonderful for the young people who rely on its 276 store for reasonably fashionable and fabulously affordable clothing -- like NBA-star endorsed basketball shoes for under $10!

I've followed the sage of this company's demise closely, hoping that it would pull through because of all the money it saves college students. While there's still plenty that could go wrong, it's looking more likely that Steve & Barry's will pull through than it has in more than a month.

As a sign of how disconnected one can be, I had to ask my 12-year old about Steve & Barry's. I had not heard of it and it is receiving way too many comments on our site to be ignored. My colleague Zac Bissonnette started blogging about it a month ago Steve & Barry's on the brink of bankruptcy? and the comments are still coming in strong as the story progressed.

Steve & Barry's filed for Chapter 11 bankruptcy on July 9, 2008, and information about its status and answers to frequently asked questions can be found here.

The company has been expanding rapidly and clearly hit a brick wall with consumer budgets severely strained and the economy facing uncertainty in the short term. However, this is supposed to be a discount chain. Perhaps the discounting amounted to selling dollars for ninety cents, and it could not make it up on volume.

This is a relatively small company, but clearly it matters to a lot of people. The number of comments we have received has surpassed most of our recent stories, even those of the Bear Stearns takeover (acquired by JPMorgan Chase (NYSE: JPM)) and the IndyMac (NYSE: IDMC) collapse.

Steve & Barry's might have had an IPO sometime in its future, but that is not likely in the current environment. What is it that makes this story so compelling to our readers? If it is because the stores are so great, what went wrong in your neighborhood?

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of any of JPM.

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.

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.

In a blow to bargain shoppers that would have been unthinkable just a few weeks ago, uber-fast growing discount apparel retailer Steve & Barry's is preparing to file for bankruptcy, according to The New York Times. The company has grown rapidly with its 50,000-100,000 square foot stores offering extremely cheap clothing aimed at college students: NBA-star endorsed basketball shoes for $8.98 (Starbury's, shown right), clothing lines endorsed by Venus Williams and Amanda Bynes, and a Sarah Jessica Parker line as well.

The company is reportedly discussing a possible deal with Sears Holdings (NYSE: SHLD), but that company isn't in such great shape either. Steve & Barry's debt load appears to be making a sale impossible without the benefit of a bankruptcy filing.

It's been a rapid fall from grace -- not so long ago, the company was the darling of mall operators looking to fill vacant big box locations. They lured Steve & Barry's with large upfront payments that kept the cash flowing for awhile. But once those were exhausted, the stores weren't profitable enough on their own.

I hold out hope for this company; it's a fantastic idea and, in some form, I think it will live on. It's my hope that at least some of the stores can be salvaged, and if not, there's always the internet. Because of its focus on retail growth, Steve and Barry's currently has no e-commerce site -- none. If someone is able to acquire this one off the bankruptcy scrapheap, I would expect that to change.

U.S. stock futures were lower early Wednesday morning as oil prices rebounded following Iran testing a long-range missile. Oil has dropped over $9 the past two days, allowing the market Tuesday to stage a rally on financials. Today, ahead of the crude inventory report, it seem oil will renew its center stage focus, damping mood despite somewhat encouraging results from aluminum giant Alcoa Tuesday after the close.

On Tuesday, after having a shaky start, U.S. stocks closed with significant gains after Federal Reserve Chairman Ben Bernanke said the Fed will try to further help brokerages with emergency funds to tap. This helped financials rally from recent doldrums. Of course, having oil prices easing by the biggest two-day drop in almost four months helped push stocks higher as well. The Dow industrials ended 152 points higher, or 1.36%, the Nasdaq Composite rose 51 points, or 2.28%, and the S&P 500 added 21 points, or 1.71%.

But oil prices this morning are again moving higher after Iran test-fired nine missiles, renewing fears of a conflict that could cut global oil supplies. Also today, traders are waiting for the weekly report on fuel inventories from the U.S. Department of Energy due at 10:30 a.m. EDT.

This one really caught me off-guard: Steve & Barry's, the college-town apparel retailer known for selling decent-quality, reasonably fashionable apparel, all at prices under $10, is said to be on the brink of bankruptcy, searching desperately for $30 million to keep the company going through 2008.

It's surprising because, in the past month alone, the discounter has opened nine new stores, bringing the total up to 270. According to The Wall Street Journal (subscription required), the company had been booking a large chunk of its profits from one-time, up-front payments made by mall operators seeking to fill vacant big-box spaces. After those payments, many of the stores are only marginally profitable.

Steve & Barry's had established a niche with ultra low-priced goods, many of which bear the endorsements of celebrities including Sarah Jessica Parker and Amanda Bynes, and athletes like Bubba Watson, Venus Williams, and Stephon Marbury.

Its cash crisis aside, I'll be shocked -- and disappointed -- if Steve & Barry's disappears anytime soon. It would seem to be a strong strategic acquisition target for a number of companies, especially anyone looking to reach out to cash-strapped consumers struggling with high gas prices. $8.88 NBA-player endorsed basketball shoes would seem to be pretty recession-proof. Wal-Mart (NYSE: WMT) could probably do great things with the company. Raising cash through an initial public offering also can't be ruled out.

Steve & Barry's appears to be (yet another) victim of overly aggressive expansion and hubris, but the concept remains strong, and I think it will be around for a long time.