Last Updated Aug 6, 2008 12:19 AM EDT
Bay Harbour Management has offered $163 million in a stalking horse bid for leases and inventory of 125 Steve & Barry's stores. The Long Island discount clothing chain filed for Chapter 11 bankruptcy reorganization July 9.
Retail expert Howard Davidowitz told Newsday the offer is "a steal."
Before you ask, a stalking horse bid is the lead or opening bid in a bankruptcy auction. If a higher bid comes along at the auction, scheduled for next week, another company could end up with at least some of Steve & Barry's 270-plus stores.
A new company, BH S&B Holdings, was created to purchase Steve & Barry's. In filings Monday in U.S. Bankruptcy Court in Manhattan, the company said it would continue to operate out of Steve & Barry's Port Washington, N.Y., headquarters and Columbus, Ohio, distribution center. It will also front $25 million for inventory awaiting delivery, which would otherwise not be paid for, according to Women's Wear Daily.
Merchandise, leases, and licensing agreements with Sarah Jessica Parker, Stephon Marbury, and others are included in the deal. Bay Harbour Management participated in the turnaround of Barney's New York and the former Aladdin Hotel in Las Vegas, now Planet Hollywood Resort and Casino.
What happens to the landlords who paid inflated tenant improvement fees? Will new owners bring in management to improve Steve & Barry's store operations or address quality concerns? Can they resuscitate the basketball career of Stephon Marbury while they're at it? Stay tuned.