Stein Mart enters bankruptcy with plans to close most or all stores

By Caroline Salls

Pittsburgh, Aug. 12 – Stein Mart, Inc. filed Chapter 11 bankruptcy Wednesday in the U.S. Bankruptcy Court for the Middle District of Florida, according to a news release.

The company said it has filed customary motions that will allow it, upon bankruptcy court approval, to maintain operations in the ordinary course of business, including 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.

Stein Mart said it expects to close a significant portion, if not all, of its brick-and-mortar stores and, in connection with those plans, has launched a store closing and liquidation process. The company said it will continue to operate its business in the ordinary course in the near term.

According to an 8-K filed with the Securities and Exchange Commission, Stein Mart entered into an agreement with Hilco Merchant Resources, LLC, Gordon Brothers Retail Partners, LLC, Great American Group, LLC, Tiger Capital Group, LLC and SB360 Capital Partners, LLC for purposes of conducting liquidation sales at substantially all of its stores. The agreement is subject to court approval.

In addition, the company said it is evaluating all strategic alternatives, including the potential sale of its eCommerce business and related intellectual property.

“The combined effective of a challenging retail environment coupled with the impact of the Coronavirus (Covid-19) pandemic has caused significant financing distress in our business,” chief executive officer and chief financial officer Hunt Hawkins said in the release.

“The company lacks sufficient liquidity to continue operating in the ordinary course of business.”

As of May 2, Stein Mart had $757.54 million in total assets and $791.25 million in total debt.

The company’s largest unsecured creditors are CIT Commercial Services of Charlotte, N.C., with a $16.45 million merchandise goods claim; Rosenthal & Rosenthal Inc. of Chicago, with a $10.68 million merchandise goods claim; Harvest Small Business Finance LLC of Laguna Hills, Calif., with a $10 million small business PPP loan claim; Wells Fargo Trade Capital Services of Boston, with a $7.76 million merchandise goods claim; Camelot Strategic Marketing & Media of Dallas, with a $5.65 million advertising and marketing claim; White Oak Commercial Finance of Atlanta, with a $2.69 million merchandise goods claim; Levtex LLC of Santa Monica, Calif., with a $1.91 million merchandise goods claim; Peerless Clothing of St. Albans, Vt., with a $1.74 million merchandise goods claim; Tharanco Lifestyles LLC of Charlotte, N.C., with a $1.71 million merchandise goods claim; and Milberg Factors Inc. of New York, with a $1.34 million merchandise goods claim.

Stein Mart said in the 8-K that it terminated MaryAnne Morin as president in connection with the bankruptcy filing, effective Aug. 11. Morin remains a member of the company’s board of directors.

In addition, the company said it eliminated a temporary 20% salary reduction for its executive management.

Stein Mart’s restructuring counsel is Foley & Lardner LLP, its restructuring adviser is Clear Thinking Group LLC and its investment banker is PJ Solomon.

Stein Mart is a Jacksonville, Fla., operator of retail stores. The Chapter 11 case number is 20-02387.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.