Jacksonville-based department store chain Stein Mart’s future is looking more uncertain as a planned stock buyout by Kingswood Capital Management, L.P. has fallen apart.
Stein Mart’s 281 stores across Florida and 29 other states have been shut down since March 18 as a result of the COVID-19 pandemic, including its six Jacksonville stores.
Stein Mart had agreed to have Kingswood acquire all outstanding common stock not already owned by Jay Stein or his affiliates or related investors. Stein is Stein Mart’s former CEO and current chairman of the board of directors.
Kingswood had agreed to buy the shares for 90 cents each. But Stein Mart’s stock has been plunging. On January 1 it closed at 67 cents. In Friday morning trading it was going for 25 cents.
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Stein Mart’s board of directors, with the exception of Stein, approved terminating the deal.
“While we both believed in the benefits of the proposed transaction, we have mutually concluded after careful consideration that given the current environment and significant uncertainty, it would not be prudent to continue to pursue the transaction,” said Richard L. Sisisky, Stein Mart Board member and chairman of a special committee, and Alex Wolf, managing partner of Kingswood in a joint statement Thursday.
Most of the company’s employees have been furloughed while executives have seen their pay temporarily reduced by 20%. Other remaining employees have also had pay reduced by 20%, according to the company.
“Stein Mart is not currently able to predict when the stores will reopen,” the company said on March 31.
WJCT News partner the Jacksonville Daily Record reported Stein Mart employs about 8,600 people.
Before the virus hit, Stein Mart reported net sales for the fourth quarter of 2019 were $336.6 million compared to $340.8 million for the fourth quarter of 2018.
Gross profit for the fourth quarter of 2019 was $86.7 million, compared to $92.4 million in 2018, according to the company's 2019 fourth quarter report.
Figures for Stein Mart's first quarter of 2020 aren't available yet.
In 2017, Stein Mart cut 10% of its Jacksonville corporate workforce at its Southbank headquarters. At the time, that plan was meant to reduce costs by $10 million.
"Rightsizing efforts are never easy,” said Stein Mart CEO Hunt Hawkins in making the 2017 announcement.
Stein Mart was founded in 1908 by Sam Stein.
Bill Bortzfield can be reached at bbortzfield@wjct.org or on Twitter at @BortzInJax.
