Florida-based discount men's and women's department store chain Stein Mart has filed for Chapter 11 bankruptcy protection, making it the latest retailer in the U.S. to succumb to the economic slump caused by the coronavirus pandemic. The company officially submitted its filing on Wednesday, announcing that it would be shutting close most, if not all, of its outlets across the country.
In a press release published after it had filed for bankruptcy, Stein Mart revealed that it has already started the process of liquidating its assets. This will involve the launch of several going-out-of-business sales throughout its nationwide outlets. The company stated that it is still evaluating other alternatives such as the sale of its e-commerce operations and intellectual property to salvage what it can from the business.
Stein Mart's chief executive officer, Hunt Hawkins, said in a statement that the combined effects of the coronavirus pandemic and the declining demand in the retail environment had caused significant financial stresses on the business. Due to its lack of liquidity, the company could no longer afford to continue operating, he added. Stein Mart currently has 281 stores spread across 30 states.
Following the submission of its bankruptcy filing, trading of the company's stocks were halted on Wednesday. The company's stock prices closed at $0.29 on Tuesday. The next day was followed by a massive sell-off that saw the stock plunged to a low of $0.16 per share. Trading was halted at $0.18 per share. Since the start of the year, the company's share price has declined by more than 70 percent.
Since the start of the pandemic earlier in the year, more than 40 major retailers have filed for bankruptcy protection. These include long-running industry leaders such as J.C. Penney, Brooks Brothers, Ascena Retail Group, and Neiman Marcus. Industry experts believe that the number of companies that will go bankrupt this year will grow as the prolonged pandemic pushes more retailers over the edge.
Several retailers that have managed to survive have mostly emerged as much smaller businesses with limited operations. Others have chosen to sell their business and continue operating under new owners. Shopping center operator Simon Property Group and licensing firm Authentic Brands Group have both participated in various biddings to acquire already bankrupt or struggling retail companies.
