Stein Mart Files For Chapter 11, Plans To Shutter Stores
The coronavirus pandemic has killed off another U.S. retailer.
Stein Mart Inc. filed for Chapter 11 bankruptcy this week, announcing plans to close a majority of its 283 stores.
The Chapter 11 bankruptcy process allows firms to operate while reorganizing their debts and operations. Stein Mart already announced plans for a complete store liquidation during its reorganization process.
The Jacksonville, Florida-based retailer intends to remain operational during the transitional period but said a challenging retail environment and financial woes stemming from the coronavirus pandemic have made it impossible to keep going long term.
In just the first quarter of 2020, the company experienced a net loss of $65.7M, or $1.38 per share, down from a profit of $4M, or 8 cents per share, a year earlier. Net sales in the first quarter also plummeted to $134.3M, down from $314.2M a year earlier.
During the same period, the firm saw a 17% increase in omnichannel sales, but this increase in mobile-related solutions was not enough to counterbalance the impact of store closings during the pandemic shutdown.
Store closures have been accelerating for years, but the pandemic has blown out the trend — 9,821 retail locations closed in 2019, and Coresight Research predicted in June that more than 25,000 stores may close in 2020.