Steve & Barry’s ‘Bitten’ by fickle trends

It will go down as a lesson for all upstart retailers—don’t bite off more than you can chew. Steve & Barry’s, Forbes’ “fastest-growing retailer you’ve never heard of” for 2005, filed for Chapter 11 bankruptcy protection in mid August, amid tanking sales and halted store traffic.

BHY S&B Holdings, a newly-formed affiliate of investment firms Bay Harbour Management and York Capital Management, received Court approval to acquire substantially all assets of the company for $163 million.

Steve & Barry’s quickly grew up from a group of university sportswear-based shops to a chain of shopping mall locations featuring private label jeans, T-shirts, jackets, polos, footwear, sweatshirts, jerseys, etc., for men, women and kids. Its model, and initial popularity, centered around offering nothing for more than $10.98. The retailer opened up its 100th store in November 2005, and in the last three years has nearly tripled in size.

In 2007, Steve & Barry’s embarked on an ambitious program to bring in hot new properties, reinventing itself with the launch of an exclusive apparel line from “Sex and the City” star Sarah Jessica Parker.

The line, Bitten, landed in stores nationwide in June 2007. Comprised of 500 items in its initial summer collection, it pushed the company’s price point up to a maximum of $19.98, banking on the style maven’s credibility in the fashion world to drive traffic. The line’s initial success led to other deals with NBA star Stephon Marbury for a sportswear collection, actress Amanda Bynes for teen/tween fashions and tennis celeb Venus Williams for women’s activewear.

While certainly deserving recognition for its high-profile licensing agreements, Steve & Barry’s kept moving farther away from its roots. While continuing to pride itself on its established price ceiling, focus shifted more to being trendy, with seemingly a new deal with a new celebrity every month.

While that may have won the company press and licensing kudos, it didn’t always translate into traffic, which was needed to make the price ceiling work.

When Steve & Barry’s focused on selling inexpensive sportswear and souvenir apparel in and around college towns, it just needed to hold down costs and churn out a captive audience. But, in building a fashion business, it exposed itself to customer fussiness even as it was paying out for famous names.

Eventually, Steve & Barry’s was ‘bitten’ by the trends it was trying to pursue.