Lakewood and Ortega stores to close as Stein Mart files for bankruptcy
After several years of struggling to find its financial footing, Stein Mart, a discount department store whose headquarters is a fixture on Jacksonville’s South Bank, fell victim to the COVID-19, as the pandemic caused it to file for Chapter 11 bankruptcy protection Aug. 12.
Included in the bold move is the company’s plan to permanently close nearly all of its 281 brick and mortar stores within 30 states in the United States. Included among the closures will be the recently renovated emporium within the Roosevelt Square shopping mall in Ortega. The Roosevelt Mall is currently under construction and in the process of being rebranded as Ortega Park. Located at 4399 Roosevelt Blvd., the store in Ortega is one of five Stein Mart stores in Jacksonville.
The Ortega store, which has been a longtime anchor within the Roosevelt Square Mall, is in the process of closing, according to a sales associate. Everything in the store is 10% off except for fragrances and fine jewelry with some items in the men’s department lowered to 30% off, she said, noting the store was completely renovated last year. The store is just beginning to liquidate its merchandise and no date has been set to when it will finally close its doors, she said.
The company filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Middle District of Florida – Jacksonville Division.
In July 2019, the company received a delisting notice from the Nasdaq Stock Exchange and was given six months to regain compliance. Handicapped with a highly leveraged balance sheet and interest burden stemming from a special dividend issued in its first fiscal quarter of 2015, the company barely turned a profit the next year and operated at a lost in 2017 and 2018 partly due to its inability to attract national brands, manage inventory and keep prices competitive, according to Businesswire.
Stein Mart is also evaluating strategic alternatives including the potential sales of its eCommerce business and related intellectual property, according to a press release.
“The combined effects of a challenging retail environment coupled with the impact of the Coronavirus pandemic have caused significant financial distress on our business,” said Hunt Hawkins, chief executive officer of Stein Mart, Inc. “The company has determined that the best strategy to maximize value will be a liquidation of its assets pursuant to an organized going-out-of-business sale. The company lacks sufficient liquidity to continue operating in the ordinary course of business. I would like to thank all of our employees for their dedication and support.”
By Marcia Hodgson
Resident Community News
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