According to this story in USA Today, Steve & Barry’s, the low-price fashion retailer has filed for Chapter 11 bankruptcy protection, the latest merchant to succumb to the current economic downturn. The company joins home furnishings chain Linen ‘n Things, catalog retailer Lillian Vernon and specialty retailer Sharper Image in filing for bankruptcy protection this year.
The company is known for its exclusive branded lines of merchandise created with high-profile entertainers and athletes, such as Sarah Jessica Parker and Venus Williams. A statement from the company blamed their current predicament on the high costs of materials and fuel prices that have caused consumers to cut back on discretionary purchases. It plans to sell all or some of its assets to repay outstanding debt, and said it is eliminating 172 corporate and field staff positions immediately.
So, what does this mean to gift card holders? It is unclear. The company can petition the bankruptcy court to continue the redemption of gift cards, like in the case of Linen ‘n Things and the Sharper Image. They may also suspend the redemption of all gift cards, however, that will be unwise, especially if the company plans to continue operations in same shape or form in the future. I checked their website for more information but there was nothing there.
If you currently have a Steve & Barry’s gift card, my suggestion is to call the local store and ask them if they are still redeeming gift cards. If they say yes, I strongly urge you to use the card NOW! If they are not redeeming gift cards, your best option is to wait and file a claim against the company’s assets with the bankruptcy court. However, as I have said many times in previous posts, your chances of getting your money back are slim since as unsecured creditors, gift card holders are at the bottom of the pecking order by which creditors are paid during bankruptcy.
Stay tuned as I will be posting updates to this story as I get clarity on what they plan to do about gift cards.
Readers, if you currently hold a Steve & Barry’s gift card, share with us what you find regarding whether you can still use the card or not. Please post your comments in the comments section below.