Retail Ecommerce Ventures (REV), which owns Pier 1, Dressbarn, and Modell's Sporting Goods, will buy the bankrupt Stein Mart chain of department stores.
The company said it would pay $6.02 million for the Stein Mart logo and brand and its brands, domain names, social media assets, and various customer information.
Stein Mart, a discount clothing chain headquartered in Jacksonville, Florida, filed a bankruptcy suit in August. The company had been experiencing financial difficulties for quite some time. The Coronavirus pandemic proved to be an insurmountable obstacle. The chain was forced to close all its 281 outlets and put up for auctioning its intellectual property.
REV representatives are confident that they will be able to restart Stein Mart next year. The company believes that the U.S. market for discounted clothing will recover quickly after the start of mass vaccinations. And Wall Street seems to share this view, as stocks of discount retailers are growing. For example, TJX Companies' shares have increased by 27% compared to last month. Ross shares have gained 30% in price, and Burlington securities have grown almost 14% in the previous month.
The main mistake of all U.S. discount retailers (including the bankrupt Stein Mart) was that they all preferred to work the old way, completely ignoring the rapid development of technology and e-commerce. Marshalls, a chain of department stores owned by TJX Companies, launched a website just last month. With this approach, financial difficulties were inevitable, and the coronavirus pandemic only accelerated events.
REV hopes to make a digital restart of Stein Mart and attract its loyal customer base in southeast Texas, Arizona, and California, where its stores are mostly located. The brand was founded back in 1908, and several generations of customers used its services. The retail chain is well known and respected.
Today, REV has multiple brands in the U.S., Canada, India, Australia, Europe, and China, which generate, according to the official statement, more than $1 billion in sales. At the same time, the company's strategy is to acquire existing ones experiencing financial difficulties instead of creating new ones. And now REV representatives are busy looking for opportunities for new such deals, most of which were made possible thanks to a coronavirus and the resulting economic difficulties.