Steve and Barry's Update - Bankruptcy Filed

Updating my post of last week about Steve and Barry's dire financial straights, the retailer filed for bankruptcy protection today in New York. The company listed $693.5 million in assets and debt of $638 million as of May 31.

As often happens when a company gets into financial difficulties, media coverage becomes part of the problem. That's not a knock on the media, just a statement of fact.

"Recent rumors and speculation surrounding Steve & Barry's financial situation have become self-fulfilling prophecies,'' the co-founders said. Suppliers will be paid under normal terms after the filing, and secured lenders gave Steve & Barry's permission to use cash collateral to pay operating costs, the company said.

Gary Sugarman, Steve & Barry's chief operating officer, said in a statement today "recent media coverage'' made it difficult to continue normal operations. Goldman Sachs Group Inc., hired to find financing or explore a sale of the company, found no buyers to prevent the bankruptcy filing, he added.