Cut-rate apparel retailer Steve & Barry’s, a popular fixture on State Street and on Football Saturdays, is going out of business. Its landlord said it will likely close its doors for good on Jan. 3.
The financial woes for the retailer began when the Steve & Barry’s national chain declared Chapter 11 bankruptcy this summer, which would have given the store the opportunity to reorganize and stay in business.
But on Nov. 18, the Steve and Barry’s national chain declared Chapter 7 bankruptcy — putting the company into liquidation.
The chain was forced to declare bankruptcy after it fell behind in payments to builders, suppliers and advertisers. In addition to the national chain’s bankruptcy, the financial woes of the State Street store only increased when the University didn’t renew its licensing contract with 4004 Inc., the apparel company that supplies Steve & Barry’s.
The State Street store was something of an anomaly for Steve & Barry’s. Most of the company’s stores were in department store-sized spaces in malls. Mall owners, faced with increasing vacancies in recent years, paid Steve & Barry’s to locate its stores in their malls in order to increase traffic. The company used those payments to fund its operations, but when the opening of new locations slowed, so did those payments.
Steve & Barry’s carries a wide variety of low-priced Michigan gear. It sells t-shirts with the names of dozens of different University departments, schools and colleges on them. Some of the store’s more esoteric shirts — “Michigan Grandma” and “Michigan Undecided” — attracted lots of student buyers.
Ed Davidson, the landlord for the State Street location of Steve & Barry’s, said he has tenants looking to move into for 303 S. State St. once the retailer leaves.
“I started looking at potential tenants when they declared Chapter 11,” Davidson said. “I found a couple (potential tenants) that were very, very interested and said, ‘I’d like to negotiate a lease with you, and if (Steve and Barry’s) goes Chapter 7, we can get something done.’ ”
Davidson said he will be sad to see the Steve and Barry’s leave the State Street location, but is excited for the new tenant to come in. He said he couldn’t say who will be taking over the space, but that the new store will make an announcement within the next couple of weeks.
When asked if he had an idea of what sort of store he wanted to move in, he only offered one guideline.
“I didn’t think the street needed a new restaurant,” he said.
Tom Heywood, executive director of State Street Area Association, of which Steve & Barry’s is a member, said he doesn’t know yet what the new store will be.
“From what I’ve heard, we’re going to be happy with it,” he said. “But that’s all I’ve heard.”
Heywood added that he doesn’t have any preference or say as to what type of store will go in.
“It’s not up to me,” he said. “It’s up to the landlords to pick.”
Robert Duerksen, owner of Great Lakes Team Apparel located next to Steve & Barry’s, said it’s too early to tell if his business will benefit once the store leaves.
“It all depends on what goes back in there,” he said. “If it’s another competitor, I guess it depends on who that might be; if it’s a non competitor than I think all three of us here locally in the same block will get some benefit. How much, that’s hard to say — we’ll know in a year or two.”
Bud VanDeWege, owner of Moe Sports Shops on North University Avenue, said he won’t know until next fall if the closing will boost business at his shop located just around the corner from Steve & Barry’s.
“It’s just too early to tell,” he said. “You have all the other economic factors weighing in, so it’s not a normal economic time anyway.”
LSA sophomore Stephanie Fischer said she doesn’t think other shops in the area will serve her needs as well as Steve & Barry’s.
“(Other stores) are definitely more expensive and they don’t have the variety in selection,” she said.
Fischer added that she was sad to see the store leaving.
“They always have the cheapest stuff. It’s really affordable and it’s really good for buying gifts for people,” she said. “It’s kind of like a campus icon.”
Shopping yesterday at Steve & Barry’s, LSA freshman Reid Jacoby said he was stocking up on t-shirts before the store closes. The retailer is offering discounts of between 30 to 50 percent.
“Everything is so cheap, and it’s good shirts,” he said. “I hope we can get something else like this, because it’s hard to buy from the bigger stores.”
LSA senior Jennifer Sharp said she’s worried that the loss of Steve & Barry’s will result in a decrease in Wolverine pride on campus.
“I think it’s sad because people come here a lot to get Michigan apparel and people won’t have as big of a selection anymore,” she said. “I think a lot of the places are a lot more high priced than here and so I think this place is really good for college kids and being able to wear college apparel on campus.”
— Daily News Editor Lisa Haidostian contributed to this story.