Steve & Barry’s: What Went Wrong

I’ve been fascinated by the rapid rise and even faster decline of Steve & Barry’s, the discount clothing chain that recently declared bankruptcy for the second time in three months — and is now shutting down for good.

The chain is liquidating its merchandise, although I didn’t find any real bargains during a recent trip to the Burbank location. That’s because the liquidators — sneaky as they are — have decided to knock 30% off a higher price point than the $8.98 that all Steve & Barry’s merchandise had been selling for.

Yep — $8.98. That may explain why Steve & Barry’s collapsed so quickly. The profit margins are either razor-thin, or not there at all, with those kind of prices. It’s rumored that Steve & Barry’s basically survived off of the shopping malls that provided incentives to the stores in bringing them in.

The chain also expanded too soon and too fast. We wrote about Steve & Barry’s arrival to Burbank last year.. but even then it seemed strange that the store could survive on so little.

Now here’s your answer: It couldn’t. That’s a shame — in these tough economic times, a bargain clothier like Steve & Barry’s should thrive. Instead, the store will soon cease to exist.

Here’s more from Business Week:

Yet Steve & Barry’s is a retail casualty. Design couldn’t save the day for this chain. Aggressive growth, instead, seemed to be the company’s goal—and perhaps its downfall. It’s bankrupt. While growth is what every business strives for, obviously, when is enough enough? Could Steve & Barry’s still be doing well, if it didn’t push for opening nearly 300 stores — almost ten times the number of stores it had five years ago — in such a relatively short time? If the company had focused more on design and quality at super-low prices, which seemed to be a priority, instead of the number of stores, perhaps it could have found itself in a different position today. One that would offer cash-strapped consumers fun, well-designed clothing at prices they could afford during the toughest of times, and would allow them to profit from the mass desire for cool apparel at bare-bones prices. Now those customers will be shopping at their competitors’ stores instead.

Steve & Barry’s stores were also located at the Beverly Connection and in Santa Monica, among other spots.

One Month to Americana

It’s still the worst-named shopping center out there (well, other than Westfield’s insistence in calling all of its malls “Westfield”): The Americana at Brand.

But what the hell… we’re hoping the arrival not only injects a little more excitement and status to Glendale, but perhaps juices property values as well.

The L.A. Times checks in on how things are going. For starters, Glendale residents are concerned about the coming traffic — but that’s balanced by their interest in seeing this thing finally open:

Some critics are quick to point out that traffic from the Galleria and other shops can already bring Brand Boulevard to a crawl. But backers argue that the residential portion of Americana might prompt those residents to walk to shops in the area rather than drive.

Glendale resident Christine Farajian said that she was worried about traffic around the project. But she said her optimism about the development outweighed those concerns.

Farajian and her fiance bought Sliders, a bar across the street from Americana, four months ago, and were building their business on the promise of what was to come.

“I feel like it will be good for the local businesses, including us,” she said. “And it will be good for the city. It will bring in money.”

Glendale is looking longingly to the Grove, an earlier Caruso development near 3rd Street and Fairfax Avenue in L.A. that is one of the more admired outdoor shopping plazas in the region.

Caruso, in an interview Monday, said the Americana could have an even bigger effect on Glendale, because the 15.5-acre project is much larger and includes housing.

“As great as the Grove is,” he said, “this is a pretty remarkable project.”

Where the Grove is meant to evoke 1940s Charleston, S.C., the Americana is meant to remind consumers of an even earlier time: “A massive elevator shaft, with exposed steel beams, is supposed to hearken back to the industrial era, said Executive Vice President Dave Williams of Caruso Affiliated. A trolley that loops around the project and onto Brand is from ‘a little bit earlier era’ than the Grove’s trolley, which travels back and forth along a linear track.”

Caruso also added a few touches that came out of his experience with the Grove: The central courtyard, for example, is much larger. And stores have more of a unique identity, as opposed to looking too mall-like.

Glendale officials are optimistic that Americana shoppers will spill out onto Brand, and help revitalize that street as well. I’m not as optimistic; people have a way of not exploring environs outside of their intended destination. We’ll see. The Americana at Brand opens at the end of April.