Steve & Barry’s, the super cheap clothing store that’s like H&M with all the Euro-DNA removed, has filed for Chapter 11 bankruptcy. Analysts say it has to do with declining credit markets throwing it into a liquidity crisis, higher commodities and fuel prices, and oh yeah, razor-thin margins on those $9 sneakers. [Marketwatch]

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  1. ArgusRun says:

    Our company owns and manages malls where Steve & Barry’s leases space, and this single bankruptcy, short of a major anchor like Sears or Macy’s folding, is the most distressing news from the retail sector. Most malls paid millions to get S&B into the mall with the understanding that that money would be recouped in rent. That will not happen. S&B also was a savior to many B-level malls, taking over large vacant spaces left when junior anchors left.

    There will be a lot of struggling malls in the next few years. Lots of closings and a big move towards mixed use. With no retailers doing new stores and no one to take over S&B spaces, look for more creative mixed use tenants. Things like office space, child care facilities and call-centers.

  2. dripdrop says:

    It’s a great idea for a store, but everything is so ill-fitting and cheap-looking.

  3. adamcz says:

    It’s funny that they called out Nike for charging $100 for sneakers, claiming that they could easily sell them for a quarter of that amount. Who’s laughing now? It isn’t Steve or Barry.

  4. savvy999 says:

    oh noes! Where will I get t-shirts that fall apart after the first wash?

  5. nweaver says:

    Actually, a lot of it is that Steve and Barry’s was run like a Ponzi scheme, getting millions for opening new anchor stores from mall owners.

    When you convince mall owners to give you $2M-6M+ to open a store in “tenant improvement” money, but only spend $1M to prep the store itself, as long as you can keep opening stores and don’t bleed money on your existing stores, its a good business.

  6. Shawna says:

    Sarah Jessica Parker’s Bitten line is actually cute and well fitting for me, actually most of their woman’s clothes fit me, surprisingly.

  7. friendlynerd says:

    @savvy999:
    H&M

  8. anibundel says:

    Please don’t blame Project Runway for this.

  9. jaydez says:

    Oh no! I like that store. All the t-shirts I’ve bought from there are still looking new after 2+ years.

    Thier pants, on the other hand, last 3-4 washes before falling apart… but hey, for $8 for a pair of pants, what do you expect?

  10. gqcarrick says:

    I have a bunch tshirts from there, I hope they stay open.

  11. jscott73 says:

    Grr, I just found out about that store a few months ago. I love it, all the clothes I have purchased there seem fine so far. Not like I’m expecting much for $9 but they are decent and I get compliments on them, I am wearing a pair of their pants right now. I sit in a cube all day for work, it’s not like I need super durable clothing, just something comfortable and somewhat stylie.

    Better go stock up, I wonder what their “Going Out of Business” prices will be like…

  12. Oface says:

    The one we have here is in a bad part of town and always looks ransacked. I’m sure it will one of the first to go.

  13. girly says:

    I never did see how getting your stuff shipped from halfway across the world fits in with low overhead.

    Maybe they could have sold sneakers for a quarter of what Nike did, but it sounds like they went for one-tenth.

    They had a good idea, maybe they stretched it a bit too far.

    I assume that accounted for having reserves for getting through a bad cycle, but maybe not enough.

    I think they said online sales would be too much overhead for them but maybe it would have helped.

    Some stores even seem to fulfill their online orders from their stores, don’t they? I ordered a pair of shoes from Naturalizer online once and they appeared to have been shipped from whatever store had them in stock.

  14. tom2133 says:

    I just discovered that store, and it was pretty neat. $30 for a shirt, tie and slacks wasn’t bad. I went back the other day, and it seemed the store was ransacked, plus they had all the winter coats out (In July!). They also had their holiday signage up (not sure if it was last year’s signage or they’re getting ready for Christmas already.)

  15. JustinAche says:

    Man, that place rocks :( I saw this news the other day. I actually used to shop there before everything was 8.98, and the day everything dropped in price, bam, bought 3 pairs of shoes and some shirts. Where else can you get a tuxedo t-shirt when you’re in the mood to be classy?

  16. thebluepill says:

    I’ve always had mixed emotions about them. For normally high-priced items like Coats, Shoes and the like for the kids, its a great place. Kids tend to tear up stuff quickly or grow out of it and $9 a pop is affordable.

    For t-Shirts and like, Walmart was not only cheaper, but 3xs the quality for those items..

    They items that had a high-margin were too low quality to sell, leaving the low margin items their hot tickets.

  17. Where will I get my Starburys now?

  18. stezton says:

    We just had one open in our mall less than a year ago. I’m surprised it’s still busy considering the lackluster quality of the clothes. A polo shirt I bought there faded out in no time. Definitely not as good as Target’s “ultimate” polo shirts.

  19. jeffs3rd says:

    The quality of their clothing seems to have gotten a bit better since they first appeared in our area. The first two pairs of jeans I purchased were ill fitting and tore apart after two wearings. Now I have two newer pairs and they fit well and wear well. Have had them for over a year.

    Their lighter jackets (faux leather) are also comfy and great for early spring/late fall, before it gets cold enough to bring out the heavy coat.

  20. jgarfink says:

    I work at Student Publications at U of M and they owe the Michigan Daily about $20,000 in advertising fees. U of M just revoked their license.

  21. @dripdrop: That’s why everything is $8.98.

  22. synergy says:

    Oh crap! I liked the clothes. Which, btw, did not fit me ill. I was overjoyed to find clothes that actually fit me properly, unlike just about everywhere else I go who seem to believe women below the height of 5’5″ don’t exist.

  23. Wubbytoes says:

    Every single pair of pants and shorts that I bought from that place fell apart within a year. It was unbelievable.

  24. DanC922 says:

    Noooo! I love Steve & Barry’s. I’ve bought lots of stuff there. Almost all of it has actually been good quality and held up well.

  25. archieleach says:

    I’m going to miss them.

  26. Uckofay says:

    I’ll keep this short

    I used to work as a “key holder” or asst manager at a store and could have seen this downfall 5 years ago. They had such a niche on college sports and alumni goods. When they tried to re-brand as a cheaper GAP, customers hated. Sure Bitten had some attention, but nothing like the college goods.

    Idiotic waste of shipping, time, persons, you name it, they were idiots. Management would stop in or ask opinions of our manager all the time, all un-heeded. This company over expanded way to fast, and like someone mentioned above; took mall deals they could not fill.

    Hubris claims another victim, thank god I finished school and got out.

  27. MMD says:

    The one Steve & Barry’s I went into was a pit of despair…dirty & disorganized. So I guess I’m not too surprised to hear this…

  28. coren says:

    I hope they don’t get sold to the Gordon’s for liquidation – the same guys who bough the Washingtion Mervyns and CompUSA across the board