Steve & Barry's announces $168 million deal to buy chain
Popular but troubled retailer Steve & Barry's may live on under new ownership. The company announced today that BHY Holdings, an affiliate...
The Associated Press
PORTLAND — Popular but troubled retailer Steve & Barry's may live on under new ownership.
The company announced today that BHY Holdings, an affiliate of investment firms Bay Harbour Management and York Capital Management, won a bid to buy the chain for $168 million.
The deal is headed to court for approval this afternoon. If that happens, the acquisition is expected to be completed Aug. 25.
Steve & Barry's, based in Port Washington, N.Y., filed for Chapter 11 bankruptcy protection in July, after ambitious growth plans were hurt by slowed spending by consumers and the credit squeeze.
Douglas Teitelbaum, managing principal of Bay Harbour Management, said if the deal is approved, many of Steve & Barry's 276 stores will remain open, and while it would close stores that are not profitable, it may look at new locations. Steve & Barry's has five stores in Washington state: at the Everett Mall and Supermall of the Great Northwest, in Auburn, as well as in Spokane, Olympia and Vancouver.
"During their extreme growth mode, which was too ambitious, they took on some leases at the wrong price and wrong location," Teitelbaum said.
He said the ownership expects to decide within a week which stores will close, ultimately determining how many jobs are affected at a store level. Teitelbaum said the owners plan to add staff at a corporate level.
The chain made a big splash with malls and consumers by offering large stores filled with low-priced clothing and shoes, featuring lines from a number of celebrities such as Sarah Jessica Parker, NBA star Stephon Marbury and Venus Williams.
"In my mind the American consumer is stretched," Teitelbaum said. "We are Americans who like to shop, but this is not the best economy we've ever had. What we need is value."
He said the company was able to thrive because of its ability to sell items with value, style and celebrity edge.
Teitelbaum said Steve & Barry's would continue all its endorsements with athletes and celebrities.
Sarah Jessica Parker expressed support for the company continuing to operate and said she looked forward "to continuing our strong partnership."
However, the company is assessing the situation with Marbury, who filed a complaint earlier this week that alleges he has unpaid royalties from Steve & Barry's.
"I am a Knicks fan, I am a Stephon Marbury fan," Teitelbaum said. "I have phenomenal respect for him and what his relationship with the company has been. ... I'm going to buy the company and then figure this one out."
Bay Harbour does have experience in purchasing distressed companies and turning them around. The firm bought retailer Barneys New York out of bankruptcy before selling it to Jones Apparel Group. And its holdings include the former Aladdin Casino, which is now operating on the Las Vegas strip as the Planet Hollywood Resort and Casino following a rebranding.
Copyright © 2008 The Seattle Times Company
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