US department store chain Stein Mart files for bankruptcy protection
Stein Mart, a US department store chain, has filed for bankruptcy protection in the US Bankruptcy Court for the Middle District of Florida – Jacksonville Division.
The Florida-based department store chain based has filed customary motions with the bankruptcy court. An approval from the court will enable Stein Mart to maintain operations in the ordinary course of business. These include the payment of wages and benefits to employees without interruption, payments to suppliers and vendors, and usage of cash collateral, among other things.
The US retailer, which operates 281 department stores across 30 states, said that the motions are usual in the Chapter 11 process and that it expects them to be approved soon after the start of its Chapter 11 case.
Stein Mart expects to close several brick-and-mortar stores and in this connection has started a store closing and liquidation process. However, the department store chain will continue to operate them in the ordinary course in the near term.
The US retailer said that it is also exploring strategic alternatives, including the possible sale of its eCommerce business and associated intellectual property.
Hunt Hawkins – CEO and Chief Financial Officer of Stein Mart said: “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. 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.”