Stein Mart, a discount retailer, said Wednesday it filed for Chapter 11 bankruptcy protection and will close most or possibly all of its stores across the United States.
The company operates about 281 stores in 30 states, according to a news release. It didn’t say how many employees could be impacted.
“The Company has filed customary motions … to maintain operations in the ordinary course of business, including, among other things, the payment of employee wages and benefits without interruption, payment of suppliers and vendors in the normal course of business, and the use of cash collateral,” the company said in a release.
Like numerous other firms that have declared bankruptcy or closed locations in 2020, Stein Mart cited the COVID-19 pandemic as a contributing factor to its financial woes.
Hunt Hawkins, chief executive officer of Stein Mart, noted the pandemic’s impact.
“The combined effects of a challenging retail environment coupled with the impact of the coronavirus (COVID-19) pandemic have caused significant financial distress on our business,” he said. “The Company has determined that the best strategy to maximize value will be a liquidation of its assets pursuant to an organized going out of business sale. The Company lacks sufficient liquidity to continue operating in the ordinary course of business. I would like to thank all of our employees for their dedication and support.”
According to court filings, Stein Mart currently has around 8,000 employees.
It’s not clear when the store closings will start.
Stein Mart started in 1908 as a small department store in Mississippi before expanding around the country.
Stein Mart shares dropped about 36 percent on Wednesday, following news of the bankruptcy filing.
Earlier this month, Lord & Taylor, one of the oldest department stores in the United States, filed for Chapter 11 bankruptcy. Other casualties include Pier 1 Imports, department store operators Neiman Marcus and J.C. Penney, J.Crew, Ann Taylor, Brooks Brothers, and more.
Brooks Brothers said late Tuesday it is likely to be acquired by Authentic Brands Group LLC and SPARC Group LLC after they increased their offer to $325 million. SPARC, a venture backed by brand manager Authentic Brands Group LLC and mall operator Simon Property Group Inc, has agreed to continue operating at least 125 Brooks Brothers retail locations as part of the deal.
Brooks Brothers, famous for its bespoke men’s suits, said a hearing to approve the sale was currently scheduled for Aug. 14, with the deal expected to be completed by this month-end. The company later clinched a $305 million “stalking horse” deal with SPARC that set the floor for other offers in a bankruptcy auction.
Reuters contributed to this report.