Steve & Barry's stores to be liquidated

NEW YORK, Nov 20 (Reuters) - Steve & Barry's stores will be liquidated by early 2009 after their new owners concluded they will be unable to obtain financing to keep the casual clothing retailer in business amid disappointing sales.

Steve & Barry's had filed for bankruptcy protection in July, and the following month sold its business to the investment firms Bay Harbour Management and York Capital Management for $168 million.

Several affiliates of the new owners filed for Chapter 11 bankruptcy protection on Wednesday in Manhattan.

According to a court filing, "sales at all stores have been disappointing" because of "the general health of the American economy and the state of the retail market in particular." As a result, the new owners violated covenants under their senior secured credit facility, and have no prospects to obtain financing to keep operating the stores, the filing shows.

"The appropriate course of action to maximize value for the benefit of all their stakeholders is an orderly liquidation," the filing shows. The liquidation is scheduled to be completed by the end of this year or early 2009, it shows.

RAS Management Advisors LLC is serving as restructuring adviser, and a joint venture led by Great American Group LLC will assist in the liquidation, the filing shows. (Reporting by Jonathan Stempel; Editing by Steve Orlofsky)