You would think in tough times that a brick and mortar retailer who is super cheap would be the place to go.  Maybe that would be the case if consumers could afford to gas up and go the mall.  But when they get there, Steve and Barry’s might not be opened for business.  This week, the company confirmed that it will file  for Chapter 11 bankruptcy protection.

My first knowledge of Steve and Barry’s came after a friend’s daughter landed a just out of college job there working as a translator in one of their Chinese factories. That was two years ago and they had opened a store in a local Chicago Mall, Old Orchard.  I visited the store and it was an unusual retail experience.  The store was huge…I’d guess 60,000 Sq. ft. – the previous tenant had been Sachs  It was filled with mega selections of t-shirts, jeans, sweats, sneakers, etc. and everything was one price.  It had a huge collection of collegiate-licensed shirts.  The “hook” was every item in the store had one price: $8.98!
 

The store didn’t last long at that location.  (Evidently, as I’ve recently read, Steve & Barry often pocketed upfront payments from mall owners giving incentives to lure retailers to fill in vacancies.) It wasn’t too long before an appropriate retailer was brought in to the space.  But, recently Steve & Barry opened in a strip-center in upscale Highland Park.  The store was right size, my guess 15,000 Sq. ft. and the quality had improved and the assortments made sense.  And it was still – one price- $8.98.  If anyone needed to worry about what was going on at Steve & Barry, I would’ve thought Old Navy.

That was a few months ago.  And they were a hot store making headlines with their line called Bitten, launched by Sarah Jessica Parker.  They even had shoes endorsed by NBA star Stephon Marbury… and yes they are priced at $8.98.

So what went wrong for this specialty retailer? I can speculate that what made them “special” was the $8.98, and with higher costs they got squeezed by their margins. I guess it goes back to one of those retail sayings “you’ll never be low enough” that we discuss when we strategize our email marketing for Menswear Specialty Stores and other brick and mortar retailers who must constantly watch their margins so that they can afford to offer the unique services that make them special.  We try to get them to market their uniqueness and what makes them special and it’s never price. I’m curious… if Steve & Barry’s had made the price tickets on all their SKUS $9.89, would it have made a difference?  Probably not to their customers but a 10% increase in revenues might have helped.

Comments Anyone?