(Adds assets, debt; retail sector’s other bankruptcy filings)
NEW YORK, Aug 4 (Reuters) - U.S. apparel chain Steve & Barry’s LLC said on Monday it agreed to be bought by a unit of investment firm Bay Harbour Management for $163 million.
The 276-store chain said it filed a “stalking horse” agreement with the bankruptcy court, an initial bid solicited strategically by Steve & Barry’s to prevent low-ball offers.
The Bay Harbour unit plans to operate the apparel chain as a going concern and to acquire certain Steve & Barry store leases, all of its merchandise from stores it plans to purchase, and all intellectual property rights, including its celebrity and brand licenses.
The offer will be subject to higher and better proposals during an auction process scheduled for August, the company said.
The privately held Steve & Barry’s and 63 affiliates sought protection with the U.S. bankruptcy court in Manhattan July 9, citing tight credit markets, higher costs and a decline in consumer spending that left it unable to pay its debts.
Steve & Barry’s has between $500 million and $1 billion of assets, debt in a similar range, and more than 100,000 creditors, according to its bankruptcy petition.
Other retailers with hundreds of stores each have also filed for bankruptcy protection this year, including Goody’s Family Clothing Inc, Linens and Things Inc, Sharper Image Inc, and jewelers Friedman’s Inc and Whitehall Jewelers Holdings Inc WHJHQ.PK.
Steve & Barry’s is known for selling inexpensive clothes and lines designed by celebrities like actress Sarah Jessica Parker, basketball player Stephon Marbury and tennis player Venus Williams. (Reporting by Sarah Coffey; editing by Carol Bishopric, Leslie Gevirtz)