Stein Mart files for bankruptcy; will close stores

Coronavirus: Stein Mart files for bankruptcy, will close stores

National retailer Stein Mart has filed for Chapter 11 bankruptcy protection, the chain announced on Wednesday, with plans to close its stores in the coming months.

The COVID-19 pandemic, company officials said, caused “financial distress” for the company that was founded in 1902.

“The combined effects of a challenging retail environment coupled with the impact of the Coronavirus pandemic have caused significant financial distress on our business,” Hunt Hawkins, the company’s chief executive officer, said in a statement. “The company lacks sufficient liquidity to continue operating in the ordinary course of business.”

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The chain filed for Chapter 11 protection Wednesday in U.S. Bankruptcy Court in Jacksonville. According to company officials, Stein Mart is considering the potential sale of its e-commerce business and related intellectual property.

Stein Mart joins nearly 40 other retailers in filing for bankruptcy protection as the COVID-19 virus forced people to shelter at home and businesses to close.

J.C. Penney, Pier 1 Imports, Brooks Brothers, Lord & Taylor and Neiman Marcus are among the retailers who have filed for bankruptcy in 2020.

Stein Mart is expected to close most if not all of its 281 stores in 30 states in the U.S. The company is based in Jacksonville, Florida, and employs 8,400 people.

According to records from the Small Business Administration, Stein Mart borrowed $10 million in June under the federal Paycheck Protection Program. PPP loans are structured to be forgiven if they are used for payroll expenses to prevent layoffs.