Wall Street Journal details difficulties at Steve & Barry's

Alert reader FSM06 clued me in to the financial issues at Steve & Barry's, the clothing retailer that features deeply discounted wares with celebrity brand name endorsements.

Steve & Barry's has a Cape Girardeau store at 134 West Park Mall, and the Wall Street Journal is reporting that the company could close as many as 100 stores in the near future, if it does not completely liquidate its holdings.

I called the local store and manager Ashley Christensen directed me to the company's public relations division in the home office. No one was available, and it is probable that with things in such flux they would not be able to give me any insight into the local store's future.

One clue to why the company is in trouble, according to the Journal, is that the Steve & Barry's business model depends on large cash payments to the company from mall operators to open stores on their properties. The total profit margin for the company's $1 billion in annual sales was about 1 to 3 percent, the Journal reported, and those profits may be drying up as retail property owners retrench in the uncertain economy.

An article from the Associated Press confirms that the company has hired a bankruptcy firm to advise it on financial alternatives.

I'll keep an eye on this.