Corrected: Consortium buys Steve & Barry's
(Company corrects information it provided in paragraph one to include York Capital Management as member of a new investment firm, adds paragraph two details about Steve & Barry’s buyers, corrects headline to show consortium bought Steve & Barry’s)
NEW YORK (Reuters) - Investment firms Bay Harbour Management and York Capital Management won an auction for Steve & Barry's LLC after offering $168 million, the bankrupt clothing chain said on Thursday.
BHY S&B Holdings LLC, a newly formed affiliate of the two investment firms, was the successful bidder at the auction that concluded early on Thursday, Steve & Barry's said in a statement.
On August 4, Steve & Barry's said it had accepted a $163 million takeover bid from a unit of the private equity firm, unless it received better offers during an auction process scheduled for later in the month.
It is not yet clear how much creditors will receive for already-shipped merchandise or other services, but the purchase of the struggling retailer helps assure that suppliers will have an outlet for future business.
"Anything that keeps a retailer open is a good thing for our clients," said Bob Carbonell, executive vice president of retail credit rating service Bernard Sands. "There are some U.S. suppliers who may not come away whole, but they'll be able to do business with the new entity."
Known for selling inexpensive clothes designed by celebrities like actress Sarah Jessica Parker and tennis player Venus Williams, Steve & Barry's had filed for bankruptcy protection in July, citing tight credit markets and a pullback in customer spending.
A court hearing on the sale motion is scheduled for 3 p.m. EST on Thursday.
Steve & Barry's said it expected to complete the deal on Monday. While most of its 276 stores will continue to operate normally, the company said an announcement of any closings should come in the next week.
The Bay Harbour unit will acquire certain store leases, all merchandise from stores, and all intellectual property rights, including celebrity and brand licenses, Steve & Barry's said in a statement.
Several retailers, including Sears Holdings Corp (SHLD.O) and Gap Inc (GPS.N), had reportedly expressed interest in the Port Washington, New York-based company.
Bay Harbour Management is known for purchasing distressed companies and overseeing their turnaround. Its holdings have included the retailer Barneys New York.
(Additional reporting by Saumyadeb Chakrabarty in Bangalore; Editing by Lisa Von Ahn)
