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Jacksonville-Based Stein Mart Warns It Could Be Forced Out Of Business

Photo of Stein Mart's corporate headquarters on the Jacksonville Southbank.
Stein Mart's corporate headquarters on the Jacksonville Southbank.

Jacksonville-based Stein Mart’s future is looking bleak, according to the annual report the department store chain has filed with the Securities and Exchange Commission.

“Our management has determined that there is a substantial doubt about our ability to continue as a going concern over the next twelve months,” the company wrote.

Although its stores have reopened, the retailer reports foot traffic has not recovered to pre-pandemic levels. The department store chain has also furloughed a “significant number” of employees and reduced the pay of remaining employees, according to the report.

“As a result of the COVID-19 pandemic and subsequent temporary store closures, our revenues, liquidity, results of operations and cash flows, and our ability to pay vendors and landlords according to standard terms have been materially adversely impacted.”

The company, which is headquartered on Jacksonville’s Southbank, describes its predicament as an “event of default” but goes on to say it has obtained waivers. It is actively negotiating with its vendors and landlords about restructuring payments, but adds, “There’s no assurance those discussions will be successful.”

As of June 10, Stein Mart said it had negotiated lease payment deferments for 220 of its stores with negotiations continuing with 41 of its landlords.

Another option Stein Mart is exploring is the sale of the company, according to the report. But an earlier attempt at a cash infusion failed in April when a planned stock buyout by Kingswood Capital Management, L.P. fell apart, also due – at least in part – to the pandemic.

According to the report, Stein Mart operates 283 stores in 30 states, with the heaviest concentration in the Southeast and Texas, where 182 stores are located. Stein Mart operates six stores in the Jacksonville area, according to its website.

According to WJCT News partner the Jacksonville Daily Record, as of mid-April, the company was furloughing most of the 8,600 employees in its stores and in its supply chain and cutting about half of the 375 employees in its corporate office.

It warned future actions “not limited to” employee furloughs and store closings were possible due to the high degree of uncertainty resulting from the “impacts from the COVID-19 pandemic.”

Related: Local, State, And National Coronavirus Coverage

Stein Mart warned it is facing other negative headwinds including unresolved legal proceedings and relying on third-party service providers for its credit card transactions and online business.

The company also warned of potential shoe disruptions, which is one of its key products, because it depends on a single supplier: DSW.

Stein Mart is in danger of being delisted by Nasdaq, saying it has until Sept. 18, 2020, to reach minimum bid compliance, which is $1 per share for at least 30 consecutive business days. At the time of this story’s publication, Stein Mart was trading at 46 cents per share.

Stein Mart’s stock has recovered from trouble before. It clawed its way back from $1.18 in December 2008 during the last recession to $16.20 in February of 2015. But since then, the stock has been steadily falling. It has been trading for under a $1 a share for more than a year, according to Google’s stock trader.

Stein Mart’s annual report to the Securities and Exchange Commission is available here.

Bill Bortzfield can be reached at or on Twitter at @BortzInJax.