Home goods retailer Stein Mart (NASDAQ: SMRT) has become the latest victim of the coronavirus pandemic, filing for Chapter 11 bankruptcy on August 12 and announcing that it would be closing all of its stores in 30 states. The announcement came just days after the retailer announced it was looking to close most of its stores amid pandemic difficulties.
The retailer had taken every measure it could to avoid store closures and bankruptcy, even as pressure mounted amid the pandemic. The firm had previously attempted both a merger with another company, as well as a $10 million Paycheck Protection Plan loan, both of which did nothing to stem the company's financial distress.
Where most of Stein Mart's competitors, such as TJ Maxx (NYSE: TJX), which owns brands Marshalls and Home Goods among others, Ross (NASDAQ: ROST) saw a gradual return of customers to their stores as pandemic related lockdowns began to ease, Stein Mart did not. Unlike its competitors, Stein Mart's critical demographic is considerably older, comprised mostly of Baby Boomers and older. Boomers, who are one of the most at-risk demographics of the pandemic, have largely stayed home to avoid contact with infected people.
With no other options, Stein Mart opted for bankruptcy. The process of putting the retailer out to pasture is being conducted by a joint venture between several companies, including Gordon Brothers, Hilco Merchant Resources, and Tiger Capital Group, among others. Starting the day after Stein Mart's bankruptcy, the retailer began liquidation sales at its stores, offering deep discounts on all goods.
"New merchandise arriving in stores, as well as customers' favorite familiar brands, are deeply discounted and will sell out quickly at these low prices. We are encouraging shoppers to take advantage of Stein Mart's abundant assortment of merchandise at substantial price reductions before it's too late." Said a representative of the joint venture.
Stein Mart's stock didn't react well to the news of the bankruptcy filing, plunging 32.3% during trading on Thursday, and only recovering a small portion during trading on Friday. Overall, Stein Mart's stock is down over 80% year over year.