“It’s cheap. It’s chic. Is it worth it?” That’s the question a fashion article in The News & Observer asks regarding a $9 little black dress from discounter Steve & Barry’s. The story observes not even Walmart has a dress for that kind of price.
The reason why I’m even delving into the subject of female fashion is because Steve & Barry’s has recently filed for Chapter 11 bankruptcy and news stories have reported that Sears is interested in either the whole company or in just a selection of some of the brands.
Getting back to the original question, I think it could apply just as well to the company. A bankrupt company can certainly be had on the cheap. I’m willing to trust that its fashions are fashionable. You have celebrities like Sarah Jessica Parker and sports stars like Venus Williams and Stephon Marbury on record as backers of the store. But is Steve & Barry’s worth it?
Well, in the fashion article, the author deems the $9 little black dresses she tried on definitely worth the money. She even thought about getting two dresses and some other stuff while she was in the store. This point definitely stuck out to me as a big positive. I think most shoppers know they can’t expect a lot for a $9 dress, and when the store and clothing surpasses those expectations, shoppers will keep coming back and buying more.
Right now, there are reportedly 276 stores open. An article from Business Week leads me to believe that what got Steve & Barry’s into trouble was a focus on unreasonable and unsustainable growth. The article suggests that Steve & Barry’s could have been in a better position today than bankruptcy if it had not pushed for opening nearly 300 stores — almost ten times the number of stores it had five years ago — in such a relatively short time. “If the company had focused more on design and quality at super-low prices … instead of the number of stores, perhaps it could have found itself in a different position today.”
After learning a little bit more about this discount fashion retailer, I’m starting to believe that an acquisition by Sears (SHLD) would be worth it and also would be yet another indication that Sears is serious about becoming a retailer. As if trying to prove that it wants to be a retailer, Sears today named Craig M. Israel, a veteran retail executive, as senior vice-president and president of apparel, responsible for men’s and women’s clothing as well as the children’s and cosmetics divisions.
If the largest problem with Steve & Barry’s was simply that it focused too much on growth, I feel that Eddie Lampert and Sears management could turn Steve & Barry’s and its brands into a much more profitable enterprise.
