Have you been wondering when, oh when the Steve & Barry's will finally open in the old Tower Records space on Broadway and West 4th Street? The answer could be never, since the retailer has some money problems. Namely they don't have any. The Shophound reports:
Steve & Barrys has retained the services of Conway, Del Genio, Gries & Co., a restructuring firm specializing in turnarounds while Goldman Sachs Group scrambles to scrape together $30 million in emergency financing to cover a string of unpaid bills that are just coming to light.
Despite growing their volume to nearly $1 billion, their profit margins are still so narrow that the chain was unable to properly finance its rapid expansion plans leaving local contractors, advertising bills and even some longtime vendors unpaid. There are rumors that the retailer may have to file bankruptcy as early as next week.
The reason they're low on cash? Their clothes are ridiculously cheap! Though the brand garnered much attention with celebrity-designed lines like Sarah Jessica Parker's Bitten, it can't have been that profitable, since every piece costs under $20.
We tried calling Steve & Barry's this morning, but they don't disclose the number of their corporate office and only have a toll-free number. So then we tried to call a random store in Massachusetts to see if they could put us through to corporate. When we finally got kind, real people on the line, they were obviously in another country (bad phone connections and all). It seems if you want to call a Steve & Barry's store in America, you (logically) have to be patched through from the other side of the world. Maybe the outsourcing is a cost-cutter? we thought. Or just a total waste of money.
Business Update: Steve & Barry's On The Ropes [Shophound]