JACKSONVILLE, Fla. – National discount department store chain Stein Mart announced Tuesday it had filed for Chapter 11 bankruptcy and laid off nearly 200 employees from its Jacksonville headquarters.
The company’s announcement said it expects to close a significant number, if not all, of its brick-and-mortar stores and is beginning a store closing and liquidation process.
“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,” said Hunt Hawkins, Stein Mart Inc.‘s chief executive officer. “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.”
Hawkins said Stein Mart will continue to operate normally “in the near term,” and is evaluating the potential sale of its eCommerce business. A going-out-of-business sale will begin Friday or Saturday, according to spokeswoman Linda Tasseff, who said she anticipates all stores will close by the fourth quarter of 2020, with closing dates varying by store.
Headquartered in Jacksonville, Florida, Stein Mart has more than 280 stores in 30 states specializing in clothing, shoes and housewares at discount prices. Many of the stores are located in community shopping centers. As of May 30, the company employed about 8,400 people. The Jacksonville Daily Record reported Tuesday that Stein Mart said it was laying off a “substantial number” of associates from its corporate office.
“Please know that this was an extremely difficult decision, and is deeply disappointing for all of us at Stein Mart. We have loved serving our communities over the years and are so grateful to our loyal customers who chose to shop our stores,” Hawkins said.
Before the pandemic began, the Jacksonville-based business had 375 employees working in its corporate office. Stein Mart closed its businesses in mid-March because of the pandemic.
It began reopening in April and eventually reopened all of its stores with reduced hours. It borrowed $10 million in June under the federal Paycheck Protection Program to help with payroll, which was estimated between $24 million and $48 million. News4Jax asked what will become of that loan if the company shuts down but was still waiting to hear back as of Wednesday evening.
The company first started doing business in 1908 in Mississippi. According to Stein Mart’s website, it currently operates six stores in Jacksonville: Atlantic Boulevard, Baymeadows Road, Roosevelt Boulevard, San Jose Boulevard and University Boulevard and Third Street in Jacksonville Beach.
Customers at the Atlantic Boulevard store said Wednesday they were disappointed in the financial downfall but not surprised.
“I feel like it’s just another one of the department stores you could walk into going down,” said shopper Jenn Dixon. “It’s a little sad. I live right up the road, so it’s nice. I do like Stein Mart. I like their styles and stuff.”
“I’m not surprised with all the online stores now, and people afraid to leave, and things being delivered for free,” said another customer named Terry. “It’s kind of sad because they’ve been around a while, and it’s a good store.”
About two dozen retailers, big and small, have filed for Chapter 11 protection this year, far exceeding the number for all of last year.
Among them: America’s oldest retailer, Lord & Taylor; J. Crew; J.C. Penney; Neiman Marcus; Men’s Wearhouse; Jos. A. Bank; Stage Stores; and Ascena Retail Group, which owns Lane Bryant and Ann Taylor.
The Associated Press contributed to this story