Steve & Barry's
Encyclopedia
Steve & Barry's was an American
retail clothing chain, featuring casual apparel. By mid-2008, the chain operated 276 stores in 39 states. The company was headquartered in Port Washington
, New York
. The company liquidated
all of its stores throughout 2008.
The chain's origin was based on various Grammar School campuses across the United States. Until 2007, it was called Steve & Barry's University Sportswear, and the chain specialized in college-related apparel and private-label casual clothing. The chain dropped the "University Sportswear" tagline after securing licensing agreements with several celebrities to develop and distribute private-label lines of clothing designed or inspired by each of them, in an attempt to expand the chain's customer base.
Founded by Steven Shore and Barry Prevor at the University of Pennsylvania
in 1985, while Prevor was an undergraduate student, Steve & Barry's became a local popular destination due to its low prices compared to other university bookstores and gift stores. The success of the original store led to the opening of locations on several Big Ten campuses, including Michigan State University
, the University of Michigan
, the University of Illinois, the University of Wisconsin–Madison
, Indiana University, and Purdue University
.
In 1998, Steve & Barry's opened a large mall-based store at Great Lakes Crossing
in Auburn Hills, Michigan
. The new line of products included denim, business casual, active wear, outerwear, and T-shirts. In addition, the company began marketing "All-American" brands such as Hershey's
, Marvel Comics
, Ford, WWE
, and General Mills
cereal, amongst others.
In 2005, Steve & Barry's leased over 3500000 square feet (325,160.6 m²) of space in shopping centers throughout the United States
, the most of any mall-based chain in the country. The result was 62 brand new supermarket-sized stores, which doubled its outlets.
In 2006, TA Associates
, a $10 billion private equity firm, closed a minority investment in the company for an undisclosed amount.
In March 2008, General Electric Holdings lent Steve & Barry's $197 million on which the company defaulted.
By the end of 2008, the company filed for Chapter 11
bankruptcy and planned to close the business. The company then liquidated all remaining merchandise, stores, and other assets., finally ceasing all operations on Jan. 30, 2010.
point guard
Stephon Marbury
, a joint venture in which the chain would produce Marbury's Starbury
Collection, a 50-item line of discount clothing, athletic apparel, and sneakers. The centerpiece of the line was the Starbury One, a basketball
sneaker that retailed for $14.98. Marbury, who developed and endorsed the line, wore the sneakers during the entire 2006-2007 NBA season to prove their quality. In March 2007 the company announced that then Chicago Bulls
center, and 4-time NBA Defensive Player of the Year, Ben Wallace
, would endorse the Starbury brand, wearing Starburys during all his games and debuting his own Big Ben Starbury sneaker in the 2007-08 NBA season.
Similarly, Sarah Jessica Parker
introduced her own clothing line, BITTEN, on June 7, 2007. The brand was originally leaked to the press during an early fashion show in March 2007. The Bitten name came from the phrase that one who becomes an actor has been "Bitten" by the acting bug. After an appearance on The Oprah Winfrey Show
, the brand launched in early June, with roughly 400 pieces of apparel that was reported to grow to 500 or more by the fall.
Announced during the summer of 2007, former Nickelodeon
star Amanda Bynes
also debuted a clothing line, Dear, on August 16, 2007. Similar to the Bitten line, Dear was a women's brand that appealed mostly to younger women.
Steve & Barry's signed tennis star Venus Williams
to market her own clothing and sneakers line called EleVen. Likewise, American golfer Bubba Watson
had his own clothing line called "Bubba Golf".
On May 15, 2008 the company debuted Laird Hamilton
's "Wonderwall" collection. The collection featured men's clothing for surfing and skating.
and Target
, with most items within the store priced around $6.98. Shore and Prevor discussed their methods for keeping prices down.
Steve & Barry's business model was to keep prices low by not advertising through traditional streams, relying on publicity and viral marketing
to get the word out, running its company and stores very efficiently, selling in large volumes, and making modest profits on each item. It also sourced apparel progressively, meaning it purchases product from a wide variety of manufacturers at different times throughout the year. The bidding between manufacturers allowed the buyer to purchase at a lower per unit cost than larger retailers who frequently have standing contracts with suppliers.
With fiscal problems mounting at the company, many reports surfaced claiming that the only real profit at the company came from the $2 to $3 million payments that the company received from landlords when it would open a new store (most of the time in distressed or hard-to-lease locations). The company made little (if any) profit on its actual apparel sales and while new stores would be very profitable for the first few months, sales would decline sharply after the store had been open for a few quarters.
reported that the struggling company might close approximately 100 of its 245 stores as a prelude to the liquidation of the entire chain. The company did not have enough capital to take it through the end of the year and was actively trying to secure financing to take it through the holiday season.
The firm filed for bankruptcy protection under Chapter 11 on July 9, 2008 according to The Wall Street Journal
. All stores were to remain open with the store's return policy, store credit and gift cards unchanged. Founders and co-Chief Executives Steve Shore and Barry Prevor cited liquidity concerns and the generally harsh conditions for retailers in recent months.
The Associated Press reported that Steve & Barry's was considering a plan to sell all or some of its assets to repay its outstanding debt. Steve & Barry's was also in talks with Sears Holdings Corporation for a possible acquisition. It was reported that Sears might be interested in buying some or all of Steve & Barry's brands.
On August 21, 2008 Steve & Barry's announced that BH S&B Holdings LLC, a newly formed affiliate of investment firm Bay Harbour Management L.C., agreed to acquire certain assets of Steve & Barry's. In addition to acquiring merchandise inventories and transfer rights to Steve & Barry's store leases, BH S&B Holdings would acquire all Steve & Barry's intellectual property rights, including its celebrity and brand licenses, and the company's key facilities, including its Port Washington, New York headquarters, Columbus, Ohio distribution center, and certain overseas offices. The acquisition was expected to be completed Monday, August 25. Bay Harbour planned to keep open about 150 of the chain's 276 stores, and brought Hal Kahn, chairman and CEO of Macy's East, on board as the new CEO.
Bankruptcy documents reveal annual sales of $656.6 million.
On November 24, 2008, after filing for Chapter 11 bankruptcy protection and closing many stores, Steve and Barry's parent company filed for Chapter 7 bankruptcy liquidation and announced the chain was going out of business. This liquidation was completed on January 30, 2009.
The New York Post reported on Jan. 9, 2009 that New York City mega-landlord Jeff Sutton had sued founders Steven Shore and Barry Prevor, along with the company's CFO and real estate director for fraud, alleging that they misappropriated $1 million set aside for store improvements.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
retail clothing chain, featuring casual apparel. By mid-2008, the chain operated 276 stores in 39 states. The company was headquartered in Port Washington
Port Washington, New York
Port Washington is a hamlet and census-designated place in Nassau County, New York on the North Shore of Long Island. As of the United States 2010 Census, the community population was 15,846....
, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
. The company liquidated
Liquidation
In law, liquidation is the process by which a company is brought to an end, and the assets and property of the company redistributed. Liquidation is also sometimes referred to as winding-up or dissolution, although dissolution technically refers to the last stage of liquidation...
all of its stores throughout 2008.
The chain's origin was based on various Grammar School campuses across the United States. Until 2007, it was called Steve & Barry's University Sportswear, and the chain specialized in college-related apparel and private-label casual clothing. The chain dropped the "University Sportswear" tagline after securing licensing agreements with several celebrities to develop and distribute private-label lines of clothing designed or inspired by each of them, in an attempt to expand the chain's customer base.
History
University of Pennsylvania
The University of Pennsylvania is a private, Ivy League university located in Philadelphia, Pennsylvania, United States. Penn is the fourth-oldest institution of higher education in the United States,Penn is the fourth-oldest using the founding dates claimed by each institution...
in 1985, while Prevor was an undergraduate student, Steve & Barry's became a local popular destination due to its low prices compared to other university bookstores and gift stores. The success of the original store led to the opening of locations on several Big Ten campuses, including Michigan State University
Michigan State University
Michigan State University is a public research university in East Lansing, Michigan, USA. Founded in 1855, it was the pioneer land-grant institution and served as a model for future land-grant colleges in the United States under the 1862 Morrill Act.MSU pioneered the studies of packaging,...
, the University of Michigan
University of Michigan
The University of Michigan is a public research university located in Ann Arbor, Michigan in the United States. It is the state's oldest university and the flagship campus of the University of Michigan...
, the University of Illinois, the University of Wisconsin–Madison
University of Wisconsin–Madison
The University of Wisconsin–Madison is a public research university located in Madison, Wisconsin, United States. Founded in 1848, UW–Madison is the flagship campus of the University of Wisconsin System. It became a land-grant institution in 1866...
, Indiana University, and Purdue University
Purdue University
Purdue University, located in West Lafayette, Indiana, U.S., is the flagship university of the six-campus Purdue University system. Purdue was founded on May 6, 1869, as a land-grant university when the Indiana General Assembly, taking advantage of the Morrill Act, accepted a donation of land and...
.
In 1998, Steve & Barry's opened a large mall-based store at Great Lakes Crossing
Great Lakes Crossing
Great Lakes Crossing Outlets is an enclosed shopping mall, super-regional in size, located in the city of Auburn Hills, a suburb of Detroit, Michigan, United States. Developed and owned by Taubman Centers, Great Lakes Crossing Outlets features over 180 stores and restaurants, a food court, and a...
in Auburn Hills, Michigan
Auburn Hills, Michigan
Auburn Hills is a city in Metro Detroit, Oakland County, in the U.S. state of Michigan. The population was 21,412 at the 2010 census. The city was formed in 1983 when Pontiac Township became the City of Auburn Hills.-Economy:...
. The new line of products included denim, business casual, active wear, outerwear, and T-shirts. In addition, the company began marketing "All-American" brands such as Hershey's
Hershey's
Hershey's may refer to:* Hershey's, a nickname for The Hershey Company* Hershey's Ice Cream produced by Hershey Creamery Company* Hershey's Chocolate World, a theme-park/visitor-center facility...
, Marvel Comics
Marvel Comics
Marvel Worldwide, Inc., commonly referred to as Marvel Comics and formerly Marvel Publishing, Inc. and Marvel Comics Group, is an American company that publishes comic books and related media...
, Ford, WWE
World Wrestling Entertainment
World Wrestling Entertainment, Inc. is an American publicly traded, privately controlled entertainment company dealing primarily in professional wrestling, with major revenue sources also coming from film, music, product licensing, and direct product sales...
, and General Mills
General Mills
General Mills, Inc. is an American Fortune 500 corporation, primarily concerned with food products, which is headquartered in Golden Valley, Minnesota, a suburb of Minneapolis. The company markets many well-known brands, such as Betty Crocker, Yoplait, Colombo, Totinos, Jeno's, Pillsbury, Green...
cereal, amongst others.
In 2005, Steve & Barry's leased over 3500000 square feet (325,160.6 m²) of space in shopping centers throughout the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, the most of any mall-based chain in the country. The result was 62 brand new supermarket-sized stores, which doubled its outlets.
In 2006, TA Associates
TA Associates
TA Associates, founded in 1968, is one of the oldest private equity firms in the United States. The firm employs a hybrid strategy making growth capital investments in developing companies and acquiring mature companies through leveraged buyout and recapitalization transactions...
, a $10 billion private equity firm, closed a minority investment in the company for an undisclosed amount.
In March 2008, General Electric Holdings lent Steve & Barry's $197 million on which the company defaulted.
By the end of 2008, the company filed for Chapter 11
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
bankruptcy and planned to close the business. The company then liquidated all remaining merchandise, stores, and other assets., finally ceasing all operations on Jan. 30, 2010.
Celebrity lines
In 2006, the chain announced its partnership with NBANational Basketball Association
The National Basketball Association is the pre-eminent men's professional basketball league in North America. It consists of thirty franchised member clubs, of which twenty-nine are located in the United States and one in Canada...
point guard
Point guard
Point guard , also called the play maker or "the ball-handler", is one of the standard positions in a regulation basketball game. A point guard has perhaps the most specialized role of any position – essentially, he is expected to run the team's offense by controlling the ball and making sure that...
Stephon Marbury
Stephon Marbury
Stephon Xavier Marbury is an American professional basketball player.The , point guard was selected out of the Georgia Institute of Technology by the Milwaukee Bucks with the 4th overall pick in the 1996 NBA Draft, but was traded shortly thereafter to the Minnesota Timberwolves.He was an NBA...
, a joint venture in which the chain would produce Marbury's Starbury
Starbury
Starbury, Inc. is an American brand of sneakers and clothing endorsed by CBA player Stephon Marbury, and was marketed by Steve and Barry's. The line was launched in September 2006, as a pair of $14.98 basketball shoes to compete with higher priced products endorsed by celebrity athletes...
Collection, a 50-item line of discount clothing, athletic apparel, and sneakers. The centerpiece of the line was the Starbury One, a basketball
Basketball
Basketball is a team sport in which two teams of five players try to score points by throwing or "shooting" a ball through the top of a basketball hoop while following a set of rules...
sneaker that retailed for $14.98. Marbury, who developed and endorsed the line, wore the sneakers during the entire 2006-2007 NBA season to prove their quality. In March 2007 the company announced that then Chicago Bulls
Chicago Bulls
The Chicago Bulls are an American professional basketball team based in Chicago, Illinois, playing in the Central Division of the Eastern Conference in the National Basketball Association . The team was founded in 1966. They play their home games at the United Center...
center, and 4-time NBA Defensive Player of the Year, Ben Wallace
Ben Wallace
Ben Camey Wallace is an American basketball center for the Detroit Pistons of the NBA. A native of Alabama, Wallace attended Cuyahoga Community College and Virginia Union University and signed with the Washington Bullets as an undrafted free agent in 1996...
, would endorse the Starbury brand, wearing Starburys during all his games and debuting his own Big Ben Starbury sneaker in the 2007-08 NBA season.
Similarly, Sarah Jessica Parker
Sarah Jessica Parker
Sarah Jessica Parker is an American film, television, and theater actress and producer.She is best known for her leading role as Carrie Bradshaw on the HBO television series Sex and the City , for which she won four Golden Globe Awards, three Screen Actors Guild Awards, and two Emmy Awards...
introduced her own clothing line, BITTEN, on June 7, 2007. The brand was originally leaked to the press during an early fashion show in March 2007. The Bitten name came from the phrase that one who becomes an actor has been "Bitten" by the acting bug. After an appearance on The Oprah Winfrey Show
The Oprah Winfrey Show
The Oprah Winfrey Show is an American syndicated talk show hosted and produced by its namesake Oprah Winfrey. It ran nationally for 25 seasons beginning in 1986, before concluding in 2011. It is the highest-rated talk show in American television history....
, the brand launched in early June, with roughly 400 pieces of apparel that was reported to grow to 500 or more by the fall.
Announced during the summer of 2007, former Nickelodeon
Nickelodeon (TV channel)
Nickelodeon, often simply called Nick and originally named Pinwheel, is an American children's channel owned by MTV Networks, a subsidiary of Viacom International. The channel is primarily aimed at children ages 7–17, with the exception of their weekday morning program block aimed at preschoolers...
star Amanda Bynes
Amanda Bynes
Amanda Laura Bynes is an American actress, comedian, singer, and fashion designer. Bynes appeared in several successful television series, such as All That and The Amanda Show, on Nickelodeon in the mid to late 1990s and early 2000s, and in 2002, she starred in the TV series, What I Like About You...
also debuted a clothing line, Dear, on August 16, 2007. Similar to the Bitten line, Dear was a women's brand that appealed mostly to younger women.
Steve & Barry's signed tennis star Venus Williams
Venus Williams
Venus Ebony Starr Williams is an American professional tennis player who is a former World No. 1 and is ranked World No. 101 as of 10 October 2011 in singles and World No. 20 in doubles as of 2011. She has been ranked World No. 1 in singles by the Women's Tennis Association on three separate...
to market her own clothing and sneakers line called EleVen. Likewise, American golfer Bubba Watson
Bubba Watson
Gerry "Bubba" Watson is an American professional golfer. Watson is one of the few left-handed golfers on tour and is known for his tremendous length. The longest driver on the PGA Tour, in 2007 he had an average drive of 315.2 yards and is capable of generating a ball speed of 194 mph, being...
had his own clothing line called "Bubba Golf".
On May 15, 2008 the company debuted Laird Hamilton
Laird Hamilton
Laird Hamilton is an American big-wave surfer, co-inventor of tow-in surfing, and an occasional fashion and action-sports model. He is married to Gabrielle Reece, a professional volleyball player, television personality, and model...
's "Wonderwall" collection. The collection featured men's clothing for surfing and skating.
Business model
The company claimed that its prices undercut all competitors, including national chains like Wal-MartWal-Mart
Wal-Mart Stores, Inc. , branded as Walmart since 2008 and Wal-Mart before then, is an American public multinational corporation that runs chains of large discount department stores and warehouse stores. The company is the world's 18th largest public corporation, according to the Forbes Global 2000...
and Target
Target Corporation
Target Corporation, doing business as Target, is an American retailing company headquartered in Minneapolis, Minnesota. It is the second-largest discount retailer in the United States, behind Walmart. The company is ranked at number 33 on the Fortune 500 and is a component of the Standard & Poor's...
, with most items within the store priced around $6.98. Shore and Prevor discussed their methods for keeping prices down.
Steve & Barry's business model was to keep prices low by not advertising through traditional streams, relying on publicity and viral marketing
Viral marketing
Viral marketing, viral advertising, or marketing buzz are buzzwords referring to marketing techniques that use pre-existing social networks to produce increases in brand awareness or to achieve other marketing objectives through self-replicating viral processes, analogous to the spread of viruses...
to get the word out, running its company and stores very efficiently, selling in large volumes, and making modest profits on each item. It also sourced apparel progressively, meaning it purchases product from a wide variety of manufacturers at different times throughout the year. The bidding between manufacturers allowed the buyer to purchase at a lower per unit cost than larger retailers who frequently have standing contracts with suppliers.
With fiscal problems mounting at the company, many reports surfaced claiming that the only real profit at the company came from the $2 to $3 million payments that the company received from landlords when it would open a new store (most of the time in distressed or hard-to-lease locations). The company made little (if any) profit on its actual apparel sales and while new stores would be very profitable for the first few months, sales would decline sharply after the store had been open for a few quarters.
Financial problems and bankruptcy plan
As of June 21, 2008, the retailer had been seeking at least $30 million to fund operations through 2008. They were freezing all assets and hired a bankruptcy lawyer to advise on filing for Chapter 11. The company was deficient in paying back a $200 million credit loan from General Electric Commercial-lending unit. On July 1, 2008, The Wall Street JournalThe Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
reported that the struggling company might close approximately 100 of its 245 stores as a prelude to the liquidation of the entire chain. The company did not have enough capital to take it through the end of the year and was actively trying to secure financing to take it through the holiday season.
The firm filed for bankruptcy protection under Chapter 11 on July 9, 2008 according to The Wall Street Journal
The Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
. All stores were to remain open with the store's return policy, store credit and gift cards unchanged. Founders and co-Chief Executives Steve Shore and Barry Prevor cited liquidity concerns and the generally harsh conditions for retailers in recent months.
The Associated Press reported that Steve & Barry's was considering a plan to sell all or some of its assets to repay its outstanding debt. Steve & Barry's was also in talks with Sears Holdings Corporation for a possible acquisition. It was reported that Sears might be interested in buying some or all of Steve & Barry's brands.
On August 21, 2008 Steve & Barry's announced that BH S&B Holdings LLC, a newly formed affiliate of investment firm Bay Harbour Management L.C., agreed to acquire certain assets of Steve & Barry's. In addition to acquiring merchandise inventories and transfer rights to Steve & Barry's store leases, BH S&B Holdings would acquire all Steve & Barry's intellectual property rights, including its celebrity and brand licenses, and the company's key facilities, including its Port Washington, New York headquarters, Columbus, Ohio distribution center, and certain overseas offices. The acquisition was expected to be completed Monday, August 25. Bay Harbour planned to keep open about 150 of the chain's 276 stores, and brought Hal Kahn, chairman and CEO of Macy's East, on board as the new CEO.
Bankruptcy documents reveal annual sales of $656.6 million.
On November 24, 2008, after filing for Chapter 11 bankruptcy protection and closing many stores, Steve and Barry's parent company filed for Chapter 7 bankruptcy liquidation and announced the chain was going out of business. This liquidation was completed on January 30, 2009.
The New York Post reported on Jan. 9, 2009 that New York City mega-landlord Jeff Sutton had sued founders Steven Shore and Barry Prevor, along with the company's CFO and real estate director for fraud, alleging that they misappropriated $1 million set aside for store improvements.