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Steve & Barry's reported in severe financial trouble

BY JAMES BERNSTEIN AND KEIKO MORRIS | james.bernstein@newsday.com, keiko.morris@newsday.com

5:30 PM EDT, July 3, 2008

Steve & Barry's, the Port Washington-based clothing retailer that opened more than 200 dress-down stores in the past few years and is the home of splashy but low-price apparel and footwear by the likes of actress Sarah Jessica Parker and Knick Stephon Marbury, plans to close 100 outlets and is considering liquidation if it can't find emergency financing, according to a published report.

The Wall Street Journal, citing "people familiar with the company," said Steve & Barry's is seeking about $40 million in financing if it must file for Chapter 11 bankruptcy protection.

Rachel Brenner, a Steve & Barry's spokeswoman, said Thursday the company would have no comment on the report in the Journal.

The article did not cite any reasons for financial problems at Steve & Barry's.

As recently as March, a Newsday story quoted executives at Steve & Barry, a privately owned company, as saying it has been growing from 30 percent to 100 percent a year for 15 years.

Steve & Barry's has more than 270 stores in 38 states. It has Long Island outlets in Hicksville, Westbury, Massapequa and Medford.

Steve & Barry's is known for its dress-down, sporty clothing. No item in the store sells for more than $20.

The chain earlier this year created high-profile fashion and footwear lines with the actresses Parker and Amanda Byrnes as well as athletes Stephon Marbury and Venus Williams.

Late last year, Howard Schacter, Steve & Barry's chief partnership officer, told Newsday that the company had had "an unprecedented year or growth," and that it had "added more square footage than any specialty retailer in the country."

Nonetheless, Schacter said, in December Steve & Barry's laid off 170 people, less than 1 percent of its total workforce of about 17,000.

"We didn't achieve every one of our very high goals," Schacter said in the interview. "It's the nature of our business." He did not return a phone call Thursday.

The founders and current co-chief executives, Steve Shore of Merrick and Barry Prevor of Syosset, who had been teenage friends, began selling bargain-priced Tee shirts at flea markets in the late 1970s. Later, they opened stores specializing in college-logo apparel.