AS REPORTED ON STYLE SIGHT WEBSITE JUNE 26TH,2008
As Steve & Barry’s LLC inked partnerships with high-profile celebrities including Sarah Jessica Parker, Amanda Bynes and Venus Williams, the retailer neglected to pay its contractors, vendors, and even advertisers, according to new information obtained by The Wall Street Journal, which first reported that the company might have to file for bankruptcy on Monday. The company needs a fast injection of up to $30m to keep from filing for Chapter 11 bankruptcy protection, and with debt owed to a number of vendors, the reality behind Steve & Barry’s media success is looking quite grim.
As reported on Style Sight- June 27, 2008
When Sarah Jessica Parker appeared on the “Today” show to promote her new collection for the store, Rhode Island contractors who assisted in preparing the Manhattan store for national television were owed $4,000. They, and many others, were never paid, according to the newspaper.
“They’ve never paid on time and always had some excuse, so when they were on the ‘Today’ show we felt really proud, but at the same time, it felt like the emperor had no clothes,” Laura Johnson, owner of carpentry firm Ottmans Services, told the newspaper. Steve & Barry’s also owes Ottmans Services $23,000 for a job completed in December, and has stopped working for the company.
Steve & Barry’s, which neglected to pay small vendors across the U.S. as well as manufacturers overseas, or allowed months of time between payments, has been banned from advertising in the University of Michigan student newspaper, The Michigan Daily, because of its unpaid debt.
Steve & Barry’s was the largest advertiser for the newspaper during the 2006-2007 school year, and fell behind on $36,000 worth of payments. Newspaper business manager Elaina Bugli, a senior at the University of Michigan, told the WSJ that the company still owes $20,326 for ads purchased over one year ago.
“It’s by far our largest unpaid debt. They owe us more than we set aside for all unpaid debts for the year,” Bugli shared with the WSJ. Complicating matters is the fact that Steve & Barry’s hold licenses to create apparel for the University of Michigan.
Steve & Barry’s has retained Goldman Sachs Group Inc. to obtain financing, and has also hired a bankruptcy lawyer. The company has also tapped restructuring firm Conway, Del Genio, Gries & Co., which also worked on Sharper Image and Linens ‘n Things. If Steve & Barry’s does not line up the appropriate financing, it may file for bankruptcy as soon as next week.