SJP or Not, Steve & Barry's Hinging on Bankruptcy

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The New York Times published an article May 1, "Is This the World’s Cheapest Dress?" referring to a floral blue dress shown right, designed by Sarah Jessica Parker for her Bitten collection for Steve & Barry's. The big question of the day: how does the retailer sell dresses for $8.98, which is rock bottom pricing even for places like Wal-Mart? There still didn't seem to be a clearcut answer by the end, even for Eric Wilson, the writer of the story—Steve & Barry's doesn't advertise it said; they open in underperforming malls; their offices aren't cushy; the company plucks youngsters from Harvard and gives them hefty positions.

Per a Wall Street Journal article, the NYT had good reason to be asking questions. Per the WSJ:

"For those doing business with Steve & Barry's, it has become hard to reconcile the hype with reality. As the chain was inking high-profile licensing deals and attracting national media acclaim, small vendors across the country—along with overseas apparel manufacturers—say they were going unpaid, or enduring months of lag time between
payments."

Further, the chain "has hired the same turnaround firm as Sharper Image and Linens 'n Things, both of which have since filed for bankruptcy. That restructuring firm, Conway, Del Genio, Gries & Co., and a spokesman for Steve & Barry's didn't return calls seeking comment. The closely held retailer has also hired a bankruptcy lawyer, and if Goldman Sachs Group Inc. is unable to line up at least $30 million in last-minute rescue financing, the company may have to file for bankruptcy as soon as next week, several people involved in the matter said."

Oh, and Steve & Barry's does advertise, but just doesn't pay for it.

"Steve & Barry's is no longer allowed to advertise in the University of Michigan student newspaper, The Michigan Daily...Newspaper business manager and University of Michigan senior Elaina Bugli said the retailer fell months behind on $36,000 in bills and still owes $20,326 for ads bought more than a year ago."