Off-price retailer Stein Mart Inc filed for Chapter 11 bankruptcy protection on Wednesday, becoming the latest apparel seller to crumble under the economic stress caused by coronavirus-led lockdowns.
The Jacksonville, Florida-based retailer also said it was evaluating strategic alternatives, including a potential sale of its online business and related intellectual property.
“The combined effects of a challenging retail environment coupled with the impact of the COVID-19 pandemic have caused significant financial distress on our business,” Chief Executive Officer Hunt Hawkins said.
The century-old retailer, which operates 281 stores, said it expected to close a significant portion, if not all, of its brick-and-mortar stores. It has already launched a store closing and liquidation process.
Stein Mart, which filed for Chapter 11 in a bankruptcy court in Jacksonville, Florida, had $197.8 million in debt at the end of the first quarter ended May 2. It posted a loss of $65.7 million in the quarter, while its total revenue more than halved.
Disruptions in the retail sector have forced many companies, including apparel brand Brooks Brothers, luxury department store chain Neiman Marcus Group, clothing retailer J. Crew Group Inc and J.C. Penney Co Inc to opt for bankruptcy protection in recent months.
Shares of Stein Mart fell 38% in premarket trade. They are down about 56% this year. (Reporting by Praveen Paramasivam in Bengaluru; Editing by Shailesh Kuber)