Goodbye to Stein Mart, Florida retailer to close all stores

ST. PETERSBURG – Brooke Taliaferro used to go regularly to the Stein Mart on 37th Avenue N. Then came the coronavirus.

Taliaferro, 76, lives just outside Parrish but would make a weekly trip to St. Pete to meet his sailing group. Then, almost religiously, she stopped at the neighboring Stein Mart.

“And I would always find something good,” she said. “I really like it here.”

But with COVID-19, those sailing encounters don’t take place and Taliaferro does fewer races overall. On Wednesday, she happened to be at her favorite Stein Mart, following a dentist appointment in the area. To her surprise, she found recently posted signs that read “ALL MUST GO” and “ALL SALES ARE FINAL”. She had hoped, perhaps, that her Stein Mart would be one of the stores spared from the Jacksonville chain’s bankruptcy restructuring.

Those hopes were dashed on Thursday when liquidators at the upscale brand’s discount store announced the closure of all 279 Stein Mart locations. The chain had filed for bankruptcy the day before, after several attempts to keep the struggling company alive – from securing a $ 10 million loan in payment for paycheck protection to seeking out ‘a merger with a spin-off company.

In the end, none of this was enough.

“You have to be the best at something or the cheapest,” said Megan Murray, a bankruptcy attorney in Tampa. “I don’t know Stein Mart was the best at anything.”

Low-cost competitors like TJ Maxx, Marshall’s, Homegoods and Ross have also had to shut down for a period during the pandemic. But their buyers have returned to their reopened, masked stores, ready to look for bargains. Stock prices of most low-cost retailers plunged but have since rebounded. TJ Maxx’s parent company, TJX, went from $ 63 per share in February to around $ 36 in mid-March. As of August 13, its price per share was at an almost pre-pandemic amount of around $ 57.

“(Stein Mart’s) position in the market was more of an older clientele,” Murray said. “They don’t buy clothes because they don’t go to work… and their generation doesn’t go out to the stores.”

Public health officials have warned those 65 and over to avoid the groups because they are more likely to die if they contract COVID-19.

Before the pandemic, Stein Mart was already working on a merger with a spin-off company owned by its chairman, Jay Stein, according to documents filed in Jacksonville bankruptcy court.

But the merger collapsed in April as the pandemic forced stores to close, leaving Stein Mart without the minimum cash flow required by the deal. The same court document also stated that Stein Mart had unsuccessfully attempted to find another buyer or financing before deciding to file for bankruptcy.

On June 18, Stein Mart was approved for a $ 10 million PPP loan with an interest rate of 1%. Small Business Administration loans can be canceled if the money is used in a specific way, the majority of it supporting the payroll.

It is not known how Stein Mart used the loan money, but the bank that funded the loan is listed as one of the top 20 retailers creditors. Other major creditors include brands like Michael Kors and Hanes.

Murray said that as the pandemic continued and retailers struggled to stay afloat, seeing companies file for bankruptcy soon after securing a PPP loan will become increasingly common.

“If you don’t use it for qualifying expenses, the harm is pretty minimal,” Murray said, excluding fraudulent expenses outside of business needs. “It’s converted into a 1% (interest) loan. It’s really cheap debt. “

Stein Mart’s liquidators have said its loyalty points will be accepted for a limited time. Store fixtures, furniture and equipment will also be sold as part of the corporate exit sale. The company estimates that it will be able to make $ 250 million from its closing sales, according to court documents.

The largest concentration of Stein Mart stores is in Florida, where it has more than 40 locations. In February, the company had 9,000 employees. Nearly 3,000 of them were still on leave on August 1.

During her afternoon shopping trip, Taliaferro snagged a new queen comforter for $ 59.99. Most of the store was only marked 10%, with a few exceptions like men’s suits and swimwear 30% off. Taliaferro said she will continue to monitor discounts, which will likely become steeper as the store nears its final days.

“I spent a lot of money here,” Taliaferro said. “But really, I feel bad for the employees.”