Steve & Barry’s: What’s Gone Wrong?

There were a flurry of reports last week that Steve & Barry’s is close to filing for bankruptcy and/or closing 100 of its 275 stores.

Few retailers have garnered more publicity over the last couple of years than the chain, which sells mostly sports apparel at prices less than $10. Steve & Barry’s is also known for taking up major vacant spaces in malls across the country and signing deals with celebrities like New York Knicks point guard Stephon Marbury and actress Sarah Jessica Parker.

We find some irony in that a chain which offers major discounts is struggling in today’s economic climate when consumers are looking for those kinds of deals. But we’ve also spoken to many in the industry who have said things like: “Well, how many $5 T-shirts can they possibly sell to fund this growth?”

Are we dealing with a good concept that simply expanded too quickly, or do you think the idea was flawed from the get go?


16 Responses to “Steve & Barry’s: What’s Gone Wrong?”

  1. 1 Michael Creswell July 7, 2008 at 8:25 am

    Since this chain made its way into our town I was wondering how long they would keep their prices so low. Just because they assumed some vacant space doesnt lower the lease rate. The chain has seemed to stay at some lower end malls or areas of town that werent exactly eutopia but lease costs are lease costs. The second factor I noticed (peeking in the stockroom) was the overhead, they had thousands of boxes of merchandise and plenty of staff to take care of it. My opinion is that they tried to make up for the low cost of a shirt by selling volumes and we (the public) only need so many novelty or sports team shirts. There bound to fade away soon if they dont revamp their current plan..

  2. 2 MallMaven July 7, 2008 at 8:27 am

    Went to The Block at Orange to check out the Sarah Jessica Parker line, and compared to what was on the web, it was very disappointing. They did not deliver on the items that made them appear appealing on the web. That left a very bad taste in my mouth. Making celebrity ops marketing deals without delivery on the “Ops” end, does not a brand make.

  3. 3 Paul Fetscher CCIM, SCLS July 7, 2008 at 8:36 am

    Haven’t we seen this movie before? This appears to be a syndrome we have previously witnessed with the likes of Home Place. Go to the landlord and request a strong lanldord contribution. A merchant then uses part of the contribution to acutally fund merchandise. One that has a sell thru, you actually have to post profits to get to the next generation of merchandise. That doens’t mean just selling a collge T Shirt for less than the college bookstore.

    A wisze landlord once told ma “All a piece of space is worth is what the NEXT tennant can pay for it”. It makes us stop and wonder how Starbucks subsequent tenants will match their heady rents.

  4. 4 Larry Ortega July 7, 2008 at 8:37 am

    Point to over exubernce, over expansion and now “over the hill”. Too much! Too fast, Too soon. The frenzy that was the mood of the country 5 years ago is taking it’s toll on all retail.

    You are going to make mistakes in real estate when you are expanding, who does’t. Sometimes bad real estate needs a bull dozer not a retailer. Lessons to be learned in this cycle and applied to the next cycle.

  5. 5 Eric July 7, 2008 at 8:44 am

    The old sales “saw” in any salesman’s annual performance review is the ability to acceptable results, predictably; S&B’s current structure throws this assumption into disarray.

    S&B banked-on customers buying a ton of their merchandise at deep discounts, and they did (obviating the need for these same customers to return any-time soon to re-stock).

    S&B (like any business) needs to build a solid platform of repeat customers-business, but I haven’t seen it (i.e. an S&B “club” for frequent shoppers, a points system to get free merchandise, etc., something-anything to bring people back into the stores after their first ravenous feast on their clothing discounts!).

  6. 6 TeenyTiny July 7, 2008 at 8:49 am

    They’ve taken way too much space for what they offer, especially since Wal-Mart, Target, and KMart are better at what they’re attempting achieve: delivering the product at a low cost price. They should go back to the basics that made them work in the first place, spend nothing on advertising, and do percentage rent deals. Forget fashion, concentrate on sweatshirts, tshirts and college apparel. Maybe jump into some fraternity wear and professional sports memorabilia, but that’s about it. Stick to your knitting.

  7. 7 bigbluefan July 7, 2008 at 1:34 pm

    The last two times I was in an S & B store looking for Michigan hats, they didn’t have any. One store was in Michigan and one was in Ohio near Toldeo. I never went back. Sounds like a lot of people aren’t going back. Another one bites the dust.

  8. 8 Redevelop July 8, 2008 at 11:30 am

    Too bad, these type of retailers should be flourishing in these downturns. I thought negative PR would have killed these guys off before lackluster sales. I can’t imagine factory conditions being that great for their workers considering their $9 retail price points.

  9. 9 B-Rad July 9, 2008 at 8:15 am

    Likewise bigbluefan, I went into the S&B in Athens, GA (Home of the GA Bulldogs), for their grand opening, and they did not have one piece of Georgia gear. I immediately knew then that this store was going to struggle. What Dawgs fan wants Florida or Tennessee gear? Unbelievable!

  10. 10 iritter July 9, 2008 at 1:34 pm

    Gosh…and I had the gall to complain when I couldn’t get a Jayhawks shirt at the NYC location!

  11. 11 kath July 9, 2008 at 10:06 pm

    So it finally happened. It was bound to happen. They ran there stores from a operational stand point horribly!! i worked there for 6 months and wow iam so glad i got out when i did. TOO bad would have thought they had a great thing going but they never figured out how to span there growth or function well internally. i guess a whole lot of retail professionals will be back in the market looking for jobs. Iam not sorry to see them go at all.

  12. 12 Retail man July 15, 2008 at 8:09 am

    Eddie Lampert should scoop them up and reestablish deals with the best
    selling steve and barrys lines of celebs. The line should go into
    revamped cleaned Kmarts like the one they are debuting midwest. This
    can bale out S&B and help Kmart as well.

  13. 13 TeenyTiny July 20, 2008 at 2:54 am

    No celebrity wants to be associated with a brand in BK. Mass Celebrity Exodus and Exiting of Contracts, for sure.

  14. 14 jeff October 14, 2009 at 12:53 pm

    steve and barrys oppened a store in my town december of 07′ i got a job there and sure i shoped there with a 30 percent discount but there was always so much back stock and not enough being sould the shirts and shoes i bought faded fast with holes and rips was dissapointed when i was laid off 2 months after being hired and they didnt even make it a full year they closed october 08′

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